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

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

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

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

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

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

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

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

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Cambridge, MA-based Arteaus Therapeutics is emerging from stealth mode today, announcing it is has raised an $18 million funding round and is developing a molecule licensed from drug giant Eli Lilly (NYSE: LLY) to prevent migraine headaches. The financing came from Cambridge, MA-based Atlas Venture and New York-based OrbiMed Advisors.

Arteaus was founded in June, says Atlas’ David Grayzel, who is serving as the startup’s CEO. The molecule it acquired from Lilly is an antibody that targets a brain protein called calcitonin gene-related peptide (CGRP). The protein is known to dilate blood vessels and induce inflammation in the tissues that cover the brain. “In the last 15 years, there has been a lot of data implicating CGRP in migraines,” Grayzel says. Arteaus’ experimental drug appears to block the CGRP pathway for up to a month, opening up the possibility of developing it into an injection that can be given just one or two times a month to prevent migraines, Grayzel says.

Grayzel describes the company’s business model as “highly virtual,” saying only half-jokingly that Arteaus has 1.5 employees, including him. “We’re trying to make it as lean as possible,” he says.

Unlike other companies that offload molecules in licensing deals, Lilly isn’t abandoning the drug it licensed to Arteaus. The two companies are working together in Arteaus’ virtual lab, Grayzel says. “We’re able to leverage the expertise at Lilly to rapidly move the compound forward,” he says.

Arteaus is currently completing a Phase 1 study and hopes to start a Phase 2 in the second half of 2012. When the Phase 2 ends, Lilly will have the option to continue developing the drug under terms that were not disclosed, but that will entail milestone payments and royalties paid to Arteaus.

Atlas investing partner Jean-Francois Formela says Arteaus is the flagship project of a new unit the VC firm formed last year, called Atlas Venture Development Corp. The unit’s goal is to form a portfolio of single-asset companies—startups that exist to develop just one drug to the point … Next Page »

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When I talked to Zogenix CEO Roger Hawley last summer about the San Diego company’s development of a needle-free drug delivery device, he said the startup’s plan hadn’t changed much since Zogenix (NASDAQ: ZGNX) was founded in 2006. The company began selling its first product, a needle-free device with a fast-acting painkiller for migraines, early last year, after winning FDA clearance for the device-and-drug combo in 2009.

Almost a year later, Hawley says the company’s story still hasn’t changed, even though Zogenix recently disclosed it has signed an agreement to collaborate with Cupertino, CA-based Durect (NASDAQ: DRRX) to develop Durect’s long-lasting reformulation of the anti-psychotic drug risperidone (Risperdal) for use with the Zogenix needle-free injector.

If approved, the companies say the controlled release formulation would be the first once-a-month antipsychotic drug available in a needle-free delivery system. Johnson & Johnson already markets a long-lasting, once every-other-week injectable form of risperidone, under the trade name Risperdal Consta.

If the new antipsychotic drugs sounds like a departure from Zogenix device-and-drug combo debut with the painkiller sumatriptan, Hawley says it’s nevertheless part of the plan. Zogenix always wanted to develop a series of drugs it could combine with its DosePro needle-free device, which is sold by prescription with a single dose and discarded after each use. The company also planned all along to target its drug development on the central nervous system (CNS). Hawley points out that a migraine is just as much a CNS disorder as schizophrenia. It’s just that a neurologist usually writes the prescription for a migraine while psychiatrists usually end up seeing patients with schizophrenia.

Risperidone is one of the most widely prescribed medications used to treat schizophrenia and biopolar I disorder in adults, according to Zogenix. Even though a long-acting version of risperidone already is on the market, Zogenix sees an opportunity because the existing long-acting version requires injecting 2 or more milliliters of the drug into the muscle twice a month —using a 21 gauge hypodermic needle (almost one-third inch in diameter).

Using a Zogenix needle-free device to inject the anti-psychotic drug once a month—and just beneath the skin—could give the psychiatric community a better way to keep schizophrenic patients in compliance with their regular dose regimens, Hawley says. Long-lasting injections are considered useful in … Next Page »

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The big boys of Seattle biotech made some news this week, but the town was humming with activity from little companies you haven’t heard of, who appeared at Life Science Innovation Northwest. More on that later.

—Seattle-based Dendreon (NASDAQ: DNDN) confirmed this week that it has signed leases on a new headquarters at the Russell Investments Center downtown, and a new home for its R&D at the Earl Davie Building, formerly occupied by ZymoGenetics. Dendreon also released its annual report, which showed it has grown from 198 employees two years ago to 1,497 companywide at last count, as of February 15. At that kind of rate, it makes you wonder how long it will be before Dendreon looks to expand again.

—Seattle Genetics (NASDAQ: SGEN), the other emerging public company on the local biotech scene, said this week it had reached an important milestone by filing its new drug application with the FDA. This is a big deal for Seattle Genetics, because if the FDA clears brentuximab vedotin (SGN-35) for sale as a new treatment for Hodgkin’s disease and anaplastic large cell lymphoma—which most analysts expect it will—then the company will have its first product that it can actually sell on the U.S. market.

—Bothell, WA-based Alder Biopharmaceuticals made its name with an antibody designed to fight cancer and autoimmune disease—pretty familiar territory in the biotech business. But this week Alder stepped out and did something that’s pretty offbeat for an antibody drug maker. Alder talked publicly for the first time, in an exclusive interview with Xconomy, about how it has created two new antibody drugs to treat migraine headaches and high cholesterol—diseases that have always been the realm of small-molecule treatments.

—Venture capital investment levels are still basically in the toilet, compared to where they were pre-downturn, but angel investment continues to reach record levels, according to a recent report from the Seattle-based Alliance of Angels. I talked about some of the basics of angel investment and the impact it can have on our region during a 5-minute segment this week on “The Conversation” with Ross Reynolds of KUOW-94.9 FM.

—Physio-Control, the Redmond, WA-based unit of Medtronic that makes heart defibrillators, said this week it bought a Swedish company called Jolife, which is developing a mechanical device for cardiopulmonary resuscitation. Terms weren’t disclosed.

—My new national column on national biotech issues, BioBeat, debuted this week. This feature started off by taking aim at Big Pharma companies who are preying on the financial weakness of biotech companies.

—Last, we had a guest editorial from Tobin Arthur, the founder and CEO of Seattle-based iMedExchange, a social network for physicians. Based on insights picked up at a recent conference, Arthur says health records are going to the cloud, going mobile, and the feds are still paying.

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Alder Biopharmaceuticals prides itself on challenging conventional wisdom. But while Alder has proved the skeptics wrong, showing it can make targeted antibody therapies in a new way with cheap and fast-dividing yeast cells, it has used this technology in a pretty conventional way—to make weapons against cancer and autoimmunity.

Now Alder is stepping out with two really unusual ideas on how to use antibodies in ways they’ve never been used before.

The Bothell, WA-based biotech company, which enticed Bristol-Myers Squibb to enter into a $1 billion partnership in 2009 to co-develop its lead drug for rheumatoid arthritis, is unveiling a couple interesting new antibodies from its discovery pipeline. These new drug candidates, which Alder is discussing today at Life Science Innovation Northwest in Seattle, are aimed at two diseases that have never been treated with antibodies—migraine headaches and high cholesterol.

The idea is to find another way to exploit Alder’s underlying technology in a place where fewer competitors tread, yet where there is still money to be made. Alder’s yeast-based system is made to be cheaper and faster at churning out antibody drugs than the usual bacterial or mammalian cells used by other companies. Partly because of the high costs of making antibodies today, most companies have developed them against diseases like cancer—where drugs can command prices of as high as $100,000. Alder’s idea is to use its more flexible platform to break out of that groove, and think about using antibodies against other chronic diseases that require lower-cost therapies.

There are still plenty of risks here, not the least of which includes whether people will pay something in the ballpark of $5,000 to $8,000 a year for a migraine treatment. Alder’s drugs are also a long way from hitting the radar of your average physician: Alder’s new migraine drug candidate is being prepped for its first clinical trial later this year, and the cardiovascular drug could enter its first human test in late 2011, or early 2012, CEO Randy Schatzman says.

Randy Schatzman

“When people typically think of antibodies in autoimmune disease and cancer, the rationale often is that these are indications in which people will tolerate the high price of those medicines, and these are indications in which people will tolerate some of the safety issues,” Schatzman says. “But we’ve been thinking, are there non-traditional markets where antibodies can play a role that people haven’t thought about in the past, but where we understand the biology?”

Migraine headaches affect an estimated 30 million people in the U.S., and nobody has ever come up with a drug that stops migraine pain before it starts. There is a family of “triptan” based drugs which generated about $3 billion in worldwide sales in 2008, although the former market leader—GlaxoSmithKline’s sumatriptan (Imitrex)—recently lost its patent and began to face generic competition.

Drugs in this class, which work by constricting blood flow to the brain, aren’t really a cure-all. They have to be taken once a patient already feels migraine pain, and then they offer some relief for half to three-fourths of patients within two hours. They don’t last … Next Page »

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Ann Arbor-based Saagara, the maker of breathing exercise apps for mobile devices, plans to release new products aimed at specific health conditions in the coming months after spending a year of marketing a yoga-inspired app for the iPhone, says co-founder and CEO Nagabhushanam “Bobby” Peddi.

(I actually demoed the firm’s yoga breathing app online for a few minutes one morning last week, during a time when I’m typically in a breathless race to meet a deadline or preparing for an interview. It’s great, but maybe sad too, that we now have apps to help us breathe properly.)

The startup aims to begin selling its first “non-yoga” breathing app at the Apple iStore this week, following feedback from some users who didn’t like the yoga themes in its existing products, Peddi says. Since its initial December 2009 release, the firm’s breathing app called “Pranayama” has been downloaded 128,000 times and is now available for Apple mobile devices, Android smartphones, and on personal computers via the Web.

Users have told the firm that the app helps them manage their stress, migraines, and other conditions. And though some users weren’t crazy about the yoga connotations in the existing apps, the company’s reviews online have been mostly positive, Peddi says.

Yet the startup is growing up from its yoga roots. It’s now getting advice from Ted Dacko, the former CEO of HealthMedia. Dacko is working with Peddi and company co-founder Alessandra Noelting on a new service to … Next Page »

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Nobody has yet come up with a drug that can stop the pain from migraine headaches before it starts. By this time next year, the people at Waltham, MA-based NeurAxon will know if they have created the first drug that works for the roughly one-third of patients who get a serious inkling before migraines kick in that pain’s on the way.

This company first grabbed our attention in August 2007, when it raised $32 million in venture capital from leading healthcare investors, including Delphi Ventures and OrbiMed Advisers. I got an update about the company’s aggressive game plan a couple weeks ago from CEO Lawrence Bloch at an investor conference in San Francisco.

Migraine headaches affect about 30 million people in the U.S., so any powerful new drug aimed at helping this group has a big opportunity. NeurAxon’s lead pill in development is designed to combine the pain relief of a standard drug from the family of “triptans,” along with the more novel ability to inhibit another enzyme called nNOS that controls pain sensations. Blocking this particular enzyme is important because no other pain drug specifically hits it, and the target is associated with what is known as “aura.” These are the flashes of light in people’s vision, the zigzagging patterns, or blind spots that about one-third of migraine sufferers get about 30 to 90 minutes before pain sets in. Early clinical trials suggest that NeurAxon’s drug might be the first that patients could take when the “aura” comes on, which means the drug could start working in time to fight the pain before it starts.

“If we can prove that we can dose at aura, it’s a fundamental breakthrough,” Bloch says. “There’s never been a drug like that.”

The current state-of-the-art “triptan” family of seven drugs generates about $3 billion a year in worldwide sales, Bloch says. The leader of the class is GlaxoSmithKline’s sumatriptan (Imitrex), which is scheduled to face competition from cheaper generic copies next year. (Although Glaxo may have protected its market a while longer with a new combo of sumatriptan with the pain reliever naproxen, called Treximet, that won FDA approval in August). Drugs in this class are not a panacea, because they have to be taken once a patient already feels migraine pain, and then they offer some relief for 50-75 percent of patients within two hours. They don’t last a full 24 hours, allowing room for so-called “rebound” headaches. The drugs also come with a warning that they can cause high blood pressure and other heart side effects like stroke.

NeurAxon, which got started in 2004, has built its secret sauce around compounds designed to last longer in the body, and be more effective by specifically hitting that extra neuronal nitric oxide synthase (nNOS) enzyme. Scientists have long known the enzyme is intimately related to pain sensations, but the target has stymied drug developers because it is so structurally similar to other families of enzymes. If you hit too many of the related enzymes, it can lead to damaging heart effects, Bloch says.

The company has completed a clinical trial in 192 patients has shown that NeurAxon isn’t causing dangerous heart affects at any dose tested, Bloch says. Now it’s time for the tougher exam. Does it work any better, is it really safe for the heart in repeated studies, and does the pain relief last long enough?

This is a pivotal year for answering those questions. NeurAxon has lined up three mid-stage clinical trials. The first … Next Page »

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Torrey Pines Therapeutics said today that the FDA has agreed to let it conduct a final-stage clinical trial of tezempanel for acute migraine headaches. The pivotal trial will examine tezempanel at a 40 milligram and a lower dose, while also monitoring patients for any heart irregularities known as QT prolongation. The timing of the trial will depend on when the La Jolla, CA-based company (NASDAQ: TPTX) can find a partner or raise cash.

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