Just came back from the Washington Biotechnology & Biomedical Association’s annual meeting in downtown Seattle, where 500-plus biotechies and distinguished guests (including more than a few local politicians) gathered for a quiche-and-berries breakfast and some keen networking.

The keynote speaker was Elias Zerhouni, the former director of the National Institutes of Health and now a senior fellow at the Bill & Melinda Gates Foundation. Just a few highlights from his talk here:

Zerhouni laid out the top five challenges in public health, as he sees it. Nothing too surprising, but a good way to frame the whole healthcare discussion:

1. The shift from acute to chronic conditions. (“This is a worldwide issue,” he emphasized. “This is the new global health horizon.”)

2. Aging population.

3. Health disparities.

4. Emerging and re-emerging infectious diseases. (Pandemics, for example.)

5. Emerging non-communicable diseases. (Things like obesity and depression, the latter of which the World Health Organization predicts will be the No. 1 cause of disability and dysfunction for people aged 25-44.)

As a world-class radiology researcher, Zerhouni also spoke to the scientific challenges the industry faces. He said the fundamental scientific barrier to doing “translational” research—that which leads to new products like drugs or devices—is the complexity of biological systems involved in diseases. “The explosion of data does not equate to explosion of knowledge,” he said. (This is a common theme across all fields of science and technology.)

On this front, Zerhouni stressed the importance of both external and internal sources of innovation. Meaning, the state of Washington should “find ways of bringing in collaboration on the translation or creation of knowledge.” He pointed out that “building relationships with the Asian Rim is probably your strategic advantage.”

For the politicians in the audience, Zerhouni noted, “Today when you get elected or not elected, the main driver is jobs, jobs, jobs.” He said his dream is that in a few years, biomarkers and healthcare stats will impact political campaigns, to the tune of, “In my district, Body Mass Index has dropped from X to Y.” (Luke previously reported on the issue of jobs being the driver of public support for biotech.)

The last issue Zerhouni addressed was a particularly interesting one: culture wars around science and technology. “Don’t be oblivious to the political, cultural, and moral aspects” of biotech and biomedical work, he said. “Be careful to not assume that everyone in the world believes what you do is holy and good.” Having dealt with the profound issues of evolution vs. creation in Washington DC—most notably in the context of stem cell policy—Zerhouni was sharing some hard-earned wisdom that everyone in the room could take home with them.

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San Diego-based Amylin Pharmaceuticals, the dark horse in the race to develop a new breed of weight-loss drugs, has struck a partnership with Japan-based Takeda Pharmaceuticals that could be worth more than $1 billion over time if the drug reaches certain goals in development and in the marketplace.

The agreement calls for Amylin (NASDAQ: AMLN) to hand a worldwide exclusive license to Takeda to co-develop Amylin’s experimental obesity drugs, including the combination of pramlintide and metreleptin, and davalintide. In return, Amylin will get $75 million in upfront cash, milestone payments based on clinical and commercial goals that could top $1 billion, and royalty payments worth a double-digit percentage of worldwide sales if the Amylin drugs ever make it onto the market.

This is a big deal for Amylin, which has been toiling in the shadow of three other companies trying to blaze a new trail in the treatment of obesity this year—San Diego’s Arena Pharmaceuticals, San Diego-based Orexigen Therapeutics, and Mountain View, CA-based Vivus. While Amylin has attracted less attention, and it is a little further behind the others in the race to the market (as I pointed out in a September feature story), it may have the most effective drug of all. Amylin is betting it has found a way to breathe new life into one of the most overhyped biotech drugs of the 1990s—Amgen’s leptin—by packaging it in combination with its own pramlintide drug for diabetes. While the Amylin drug needs to be taken by injection and its rivals are oral pills, it has shown some strong promise that it can help people shed pounds in clinical trials, and the market has big potential. About two-thirds of people in the U.S. are considered overweight or obese, according to estimates from the Centers for Disease Control and Prevention.

“Amylin and Takeda are excited about working together to address the significant unmet need for the millions of patients who need better solutions to manage obesity,” said Amylin CEO Dan Bradbury, in a statement.

Data on the Amylin drug combo is still preliminary, but it is encouraging. The company looked at a variety of doses in a study of 608 overweight or obese patients, and has reported preliminary results after a little more than six months of observation. Patients on the highest doses, and who had body-mass indexes of less than 35, lost 11 percent of their body weight on the Amylin drug combo, compared with 1.8 percent average body weight loss in the placebo group.

Still, there are caveats in the data. Patients who are more severely overweight, with a body-mass index of greater than 35, saw some benefit on the Amylin combo, but not as much as less-obese patients. And the Amylin combination still has to be injected twice daily, while other drugs can be taken as oral pills, so it remains to be seen how many injections obese patients will be willing to put up with.

But apparently Takeda liked what it saw enough that it made some big commitments to the Amylin pipeline, which is interesting given that none of the other three biotech companies with weight-loss drugs have yet been able to rope in a Big Pharma partner. Under the terms of the deal, Amylin will be responsible for all development work through Phase II in the U.S., while Takeda will handle pivotal trials in the U.S., and all phases in the rest of the world. Takeda will pay for 80 percent of the development expenses in the U.S., while Amylin picks up the rest in the U.S. and Takeda pays for all development costs outside the U.S. Takeda will pay for all of the commercialization costs worldwide, and Amylin will have an option to co-market the two lead drugs or any follow-ons that contain their active ingredients.

Takeda and Amylin are familiar with each other as contenders in the diabetes drug market. Amylin gets 90 percent of its revenue from exenatide (Byetta) for diabetes, while Takeda’s biggest profit driver is pioglitazone (Actos) for diabetes. Since many diabetic patients also struggle with obesity, both companies have had their eye on expanding into that larger market for some time.

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Life would be wonderful at Arena Pharmaceuticals if it truly were the biggest loser, to borrow a phrase from the NBC reality TV show on people who are trying to lose weight. But no matter how hard you look at it, the clinical trial data just doesn’t say Arena’s weight loss pill that helps people shed more pounds than rival treatments from San Diego-based Orexigen Therapeutics (NASDAQ: OREX) or Mountain View, CA-based Vivus (NASDAQ: VVUS).

So if you’re Arena, and you’ve invested 12 years and about $1 billion in developing a potential multi-billion dollar weight-loss pill, what do you do? The strategy is becoming clearer by the day. Arena (NASDAQ: ARNA) is talking a lot about its squeaky-clean safety profile suitable for a broad market, enough weight loss to get the attention of most primary care doctors, and a unique claim that its medicine is the only one that won’t raise patients’ blood pressure.

“We saw patients’ blood pressure actually decrease, which is unique in obesity studies,” says Jack Lief, Arena’s CEO. I spoke to Lief by phone yesterday during a break at The Obesity Society meeting in Washington, DC. “Doctors have told us that lowering the cardiovascular risk factors associated with obesity is very important.”

Advances like Arena’s in the battle against excess fat have been one of the big stories in biotech this year. Obesity is one of the nation’s biggest public health problems, with two-thirds of the U.S. population considered overweight. As I wrote last month, drug companies know the winner in this market might dominate the biggest pharmaceutical market ever. Public health officials say obesity often leads to diabetes, cardiovascular disease and all kinds of other ailments that cost the country billions of dollars, so there is sure to be some debate about how much bang society might get for the many bucks it will be asked to shell out for these drugs.

Jack Lief

Whether any of the three companies can even reach the market is still an open question, because this market has also been a graveyard since Wyeth’s fen-phen drug combination was pulled from the market after patients suffered damaged heart valves in the 1990s. The most-prescribed treatment for obesity today is the 50-year-old generic stimulant phentermine, which raises blood pressure and can cause insomnia, Lief says. While Arena’s competitors appeared to show a greater magnitude of weight loss when they were compared with placebos, Arena says its drug can still compete, partly because the market is so big and underserved beyond the traditional diet and exercise regimens.

“We hear it from doctors over and over again, they need more tools in their toolbox,” says Dominic Behan, Arena’s chief scientific officer. Based on Arena’s market research surveys of physicians, they have found doctors want “something to help patients lose weight fast, it’s got to be safe, and you have to be able to stay on it long enough to achieve progress on the cardiovascular [goals].”

Arena announced fairly detailed results …Next Page »

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The first half of this year, Amylin Pharmaceuticals CEO Dan Bradbury was absorbed in the closest thing corporate America has to political warfare—a boardroom challenge from billionaire Carl Icahn and another unhappy shareholder, Eastbourne Capital. The second half has been more about doing the basics Amylin (NASDAQ: AMLN) must do if the San Diego diabetes specialist is ever going to enter the top tier of big, profitable biotech companies.

Now that the dust appears to finally have settled on the proxy fight—new director Paulo Costa was elected the chairman last month—Bradbury has been back hammering away at the company’s need to make sure it nails the potential blockbuster diabetes drug in its pipeline. Yesterday, he was happy to talk about it by phone while he visited Amylin’s new biotech drug factory in West Chester, OH.

The importance of Amylin’s new factory to its future is hard to overstate, so there’s good reason for the CEO to drop in and make sure the troops keep their collective eye on the ball. Amylin and its partner Eli Lilly have made a $500 million investment in the factory, dating back to December 2005, in order to meet market demand for what they hope will be the next big thing for diabetes, exenatide once-weekly. This plant, which now has 250 employees, is getting ready to undergo an FDA inspection in the next six months as Amylin and Lilly seek clearance to start selling the drug in the U.S. It’s the only place in the world with the expertise, and capacity, to meet the first three years of market demand for exenatide once-weekly, which will seek to grab big market share among the 25 million people in the U.S. with diabetes.

To hear Bradbury tell the story, this is the time to execute on the fundamental game plan with things like manufacturing, and not for Monday morning quarterbacking about whether the coach is calling the right plays.

Dan Bradbury

“Certainly in the first half of the year there were a lot of distractions for me. I have more time now to focus on actually running the business as opposed to board issues,” Bradbury says, during a break from meetings with Amylin’s Ohio staff. “It’s all about execution at the moment.” He adds,”We need to make sure everyone is fully on board with where we are as a company. The launch of exenatide once-weekly next year is critical to the future of the company.”

Why does getting this new drug right matter so much? Amylin generates almost 90 percent of its revenue from exenatide (Byetta), a novel peptide drug that was first approved by the FDA in April 2005 for patients who weren’t able to control their blood sugar with existing meds. The drug has gone on to become a commercial success, generating $678.5 million in sales last year, just its third full year on the market.

But the existing product has its limits, partly because it must be injected twice-daily. So Amylin and Lilly have sought to make this drug a lot more appealing to millions of patients by obtaining a license to drug delivery technology from Cambridge, MA-based Alkermes (NASDAQ: ALKS). That technology encapsulates the same peptide in a polymer microsphere that slowly dissolves in the bloodstream, so patients only need to get stuck with a needle once a week, not twice a day.

This new-and-improved drug has generated clinical trial data so far that Bradbury says are good enough to beat the biggest selling drugs in the diabetes market—Merck’s …Next Page »

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Arena Pharmaceuticals can breathe a sigh of relief. Twelve years of work and $1 billion invested in drug development isn’t going down the drain. The San Diego-based company is reporting today that it has passed the second big clinical trial it needs to win FDA approval to sell an obesity drug that has potential to be used by millions of people, and which could generate billions in sales.

The long-awaited results from Arena (NASDAQ: ARNA) from a trial of 4,008 patients essentially confirm what the company found in a previous study of 3,182 patients back in March. The drug met at least one of the FDA’s benchmarks for effectiveness as an obesity treatment and was found to be safe and well-tolerated. Arena plans to present all the nitty-gritty details next month at The Obesity Society meeting in Washington D.C., and plans to ship off an application to the FDA by the end of this year.

“We’re excited. We’ve accomplished what we set out to accomplish,” says Jack Lief, Arena’s CEO.

Obesity is one of the nation’s biggest public health problems, with two-thirds of the U.S. population considered overweight. As I described in a story Monday, drug companies know the winner in this category might dominate the biggest pharmaceutical market ever. In our couch-loving, junk-food eating culture, health officials say obesity often leads to diabetes and a raft of other costly health problems. Yet Big Pharma has been gun shy about this market opportunity since Wyeth was burned by the multi-billion legal payments related to the heart damage that patients suffered from the fen-phen drug in the 1990s. Two years ago Sanofi-Aventis failed to win approval for an obesity drug that was linked to rare cases of suicidal thinking. If any of the new contenders can assure the FDA their drug is truly safe, obesity drugs will again become a popular culture phenomenon, and will likely get pitched as a pre-emptive cure-all for illnesses related to obesity—like diabetes, high blood pressure, high cholesterol, and depression.

Although Big Pharma has been cautious, Arena and other biotechs are in hot pursuit of the market. San Diego-based Orexigen Therapeutics (NASDAQ: OREX), Mountain View, CA-based Vivus (NASDAQ: VVUS), and San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) have all shown encouraging results from mid-or-late stage clinical trials. Vivus and Arena appear to be ahead in the race, with stated goals of sending their applications to the FDA by the end of this year. Orexigen plans to turn in its FDA filing in the first half of 2010, while Amylin is still in mid-stage clinical trials.

So what did Arena really learn from this huge clinical trial coming out today, known as Blossom?

Patients in the Blossom study were followed for one year after they were randomly assigned to get either a twice-daily pill, a once-daily pill, or a placebo. Patients on the twice-daily Arena treatment lost the most weight—an average of 5.9 percent of their body weight, compared with 2.8 percent on placebo. That finding, by itself, isn’t good enough to pass muster with the FDA, because it typically wants …Next Page »

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The pharmaceutical industry has set its sights on winning a huge new market, with four life sciences companies (three of them in San Diego) in a race to develop the next big obesity drug. Get the latest news as that story unfolds and other developments in San Diego’s life sciences sector.

—Business has been surging for San Diego-based Quidel (NASDAQ: QDEL), which says it went to seven-day-a-week manufacturing of its diagnostic flu test kits last April. The company says it’s experienced an unprecedented volume of orders in anticipation of a worsening global flu pandemic.

—San Diego’s Tioga Pharmaceuticals, which was founded in 2005 and has received about $24 million in venture funding, has been developing a drug for irritable bowel syndrome as a virtual company. As Denise reported, Tioga’s team—which officially consists of only one full-time employee—has seldom been in the same room. Instead, they connect through email and conference calls that can last up to two hours.

—Luke profiled a new entry in the race to develop a new obesity drug. In addition to San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA), crosstown rival Orexigen Therapeutics (NASDAQ: OREX), and Vivus (NASDAQ: VVUS) of Mountain View, CA, San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) is developing an obesity drug that combines its pramlintide diabetes drug with metreleptin, a genetically modified version of the leptin hormone.

—Gen-Probe (NASDAQ: GPRO), the diagnostic test maker based in San Diego, plans to spin off a new business called Roka Bioscience that will use Gen-Probe technology to develop tests for industrial uses such as food safety and pharmaceutical production. Roka, which will be based in San Diego, will have 18 former Gen-Probe employees and be headed by former LifeCell CEO Paul G. Thomas.

—Celladon, a San Diego life sciences company focused on gene therapy , has raised another $2.8 million in recent weeks. The latest financing will keep Celladon operating until the company completes its clinical trial of a groundbreaking treatment for congestive heart failure.

—Denmark’s Santaris Pharma has recruited former Isis Pharmaceuticals (NASDAQ: ISIS) drug development executive Art Levin to open a U.S. subsidiary in San Diego. The six-year-old Danish company plans to hire 8 to 10 employees in San Diego as part of its quest to develop new drugs based on microRNA technology.

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The competition to create new obesity drugs is usually portrayed as a three-way battle royal among San Diego’s Arena Pharmaceuticals, crosstown rival Orexigen Therapeutics, and Mountain View, CA-based Vivus. Yet there’s one more San Diego biotech company with a drug in an earlier phase of development, Amylin Pharmaceuticals, which may just have the most effective weight loss drug of the bunch.

This is the story of Amylin’s effort to resurrect one of the biotech industry’s notorious flame-outs of the 1990s—leptin. We first told the tale back in October of how Amylin plucked this drug from Amgen’s scrap heap, reimagined it in tandem with its diabetes drug pramlintide (Symlin), and took another shot to see if leptin would ever live up to all that misplaced hype from years ago.

Obesity is one of the nation’s biggest public health problems, and drug companies know the winner in this category might dominate the biggest pharmaceutical market ever. In this couch-loving, junk-food eating culture, health officials now say two-thirds of U.S. adults have become overweight or obese. Yet Big Pharma has been gun shy about this market opportunity since Wyeth was burned by the multi-billion legal payments related to heart damage patients suffered from the fen-phen drug combo in the 1990s, and Sanofi-Aventis failed to win approval two years ago for a drug that was linked to rare cases of suicidal thoughts. If any of the new contenders can assure the FDA their drugs are truly safe, obesity drugs will again become a popular culture tsunami, and will be pitched as a catch-all for illnesses related to obesity—like diabetes, high blood pressure, high cholesterol, and depression.

Leptin was once hailed as the magic bullet for obesity based on rat studies in the 1990s. Amylin (NASDAQ: AMLN) isn’t ready to make any breathless claims yet, but its combination of pramlintide and a genetically modified form called metreleptin has shown far more convincing evidence from human trials that it has discovered something potentially big. It’s also an injection designed to melt away fat in a different way than the others, which mainly hit receptors in the brain that control the body’s feeling of fullness.

“This is a big deal,” says Amylin’s Christian Weyer, the company’s vice president of corporate development for diabetes and obesity.

Data on the Amylin drug combo is still preliminary, but they are encouraging. The company looked at a variety of doses in a study of 608 overweight or obese patients, and has reported preliminary results after a little more than six months of observation. Patients on the highest doses, and who had body-mass indexes of less than 35, lost 11 percent of their body weight on the Amylin drug combo, compared with 1.8 percent average body weight loss in the placebo group.

There are caveats in the data. Patients who are more severely overweight, with a body-mass index of greater than 35, saw some benefit on the Amylin combo, but not as much …Next Page »

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Arena Pharmaceuticals (NASDAQ: ARNA) plans to announce results of a 4,000-patient clinical trial of its obesity drug lorcaserin this month. But Northern California rival Vivus (NASDAQ: VVUS) announced results of its own obesity drug first. Get the skinny on all this and the rest of San Diego’s life sciences news.

—San Diego’s Arena Pharmaceuticals is set to release the results of a major study that was designed to see whether a high or low dose of its experimental drug lorcaserin can help patients lose weight. As Luke reported, Arena has a lot riding on the outcome. The company has raised almost $1 billion and spent 12 years developing its drug.

—Meanwhile, Mountain View, CA-based Vivus set high expectations yesterday when it reported that a high dose of its drug, which is a combination of phentermine and topiramate, helped patients lose an average of more than 10 percent of their body weight.

—After six years of development, San Diego’s Minnow Medical is working to commercialize technology that founding CEO Tom Steinke describes as an exciting advance in balloon catheters, which are used in angioplasty. After raising $22 million and expanding Minnow Medical to 28 employees, Steinke is seeking additional capital from prospective investors.

—Cambridge, MA-based Genzyme (NASDAQ: [[ticker: GENZ]]) paid $7 million to acquire a lot of patents and proprietary know-how in gene therapy from Seattle’s Targeted Genetics (NASDAQ: [[TICKER:GENZ]]). Targeted Genetics delivered the intellectual property earlier this week to San Diego, where Genyzme operates a gene therapy facility.

—San Diego’s Metabasis Therapeutics (NASDAQ: [[ticker: MBRX]]) said it has received a Nasdaq delisting notice, which may be the least of its worries. The ailing biotech said last week it hired a financial firm to evaluate its strategic options. Metabasis also announced the resignation of Mark Erion, the company’s CEO, chief scientific officer, and director. Chairman David Hale is overseeing what appears to be the company’s end game.

—San Diego’s Anadys Pharmaceuticals (NASDAQ: [[ticker: ANDS]]) said it has started a mid-stage clinical trial of its lead drug candidate for patients with hepatitis C. The company said results of the experiment should be available by year-end, with more follow-up data to come in 2010.

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The obesity drug competition just got tougher for a pair of San Diego-based companies. Shares of Mountain View, CA-based Vivus (NASDAQ: VVUS) shot up this morning after it said its experimental obesity drug helped people lose a substantial amount of weight in a pair of clinical trials with more than 3,750 patients.

Vivus reported the detailed results on its drug, a combination of phentermine and topiramate that it hopes to market as Qnexa, on a conference call with analysts this morning. The treatment helped patients lose an average of more than 10 percent of their body weight on a high dose, compared with less than 2 percent on a placebo in a pair of trials after a year of observation. The FDA typically likes to see at least a 5 percentage point advantage for obesity drugs, so these findings at first glance anyway, appear to clear that bar easily. The most common side effects were dry mouth, tingling, constipation, altered taste, and insomnia, Vivus said in a statement. People on the drug also saw improvements in the related health threats from obesity—high blood pressure, blood sugar, and cholesterol.

Vivus CEO Leland Wilson called the results “unprecedented.”

“This morning, Vivus released highly impressive Phase 3 results that exceeded our already high expectations and significantly differentiated Qnexa from the competition,” said Cory Kasimov, an analyst with JP Morgan, in a note to clients this morning.

Vivus shares rocketed more than 55 percent in pre-market trading after the announcement to $10.90. The news wasn’t as good for Vivus’s top two competitors in the obesity drug field—San Diego-based Arena Pharmaceuticals (NASDAQ: ARNA) and Orexigen Therapeutics (NASDAQ: OREX).

Arena is eagerly awaiting results from a trial of 4,000 patients this month, and is getting ready to apply for FDA approval by the end of 2009—the same time as Vivus. Orexigen is a little further behind, hoping to file its application in 2010. Both of those companies underwhelmed investors when they released the first results from their pivotal clinical trials earlier this year, although investors have bid up their shares with some more confidence as more data have been released in recent months.

All three companies are hoping to break new ground in one of the biggest potential pharmaceutical markets. About two-thirds of people in the U.S. are considered overweight or obese, largely because of the dangerous combination of a sedentary lifestyle and unhealthy diets. This has historically been a minefield for Big Pharma companies. Wyeth shelled out billions in legal settlements after the fen-phen diet drug combo was found to damage heart valves, and Sanofi-Aventis failed to win approval of another class of therapy in 2007 after regulators found rare cases of suicidal thinking among people on the drug.

Safety is critical for any obesity drug that might be taken by millions of people without an imminent life-threatening condition, so Vivus had to present a few slides to investors. There were no suicide attempts, and no indication of increased rates of suicidal thinking on the low or high doses of Qnexa, or in the placebo group, Vivus said. Depression scores improved for patients on Qnexa. Basically, there were no surprises, the company said.

There was a lot of data in the Vivus announcement, and it wasn’t made in a peer-reviewed journal or at a scientific meeting, so it’s always hard to draw absolute conclusions the way the market is doing this morning. We will see in the coming months how Arena and Orexigen—and other companies looking at the obesity market—will have to position their products now that Vivus has set what looks like a high standard. Vivus’ goal will be to get the data published in the New England Journal of Medicine, and present it at numerous medical meetings, Wilson told analysts.

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San Diego-based Arena Pharmaceuticals has spent a dozen years, and raised almost $1 billion from investors and partners, to create a new drug that helps millions of people lose weight. This month, the company will find out whether the time and money was well spent.

Arena (NASDAQ: ARNA) plans to unveil results of a 4,008-patient clinical trial in September that will answer vital questions about its experimental pill, lorcaserin. The study, called Blossom, is designed to see whether a high or low dose of the treatment can help patients lose weight over a full year compared to a placebo. The study will also look at whether the Arena drug helps with many ailments that stem from obesity—high blood pressure, cholesterol, high blood sugar, and inflammation, to name a few.

If this clinical trial confirms the findings of another major trial from earlier this year, Arena will bundle the data together and ship it to the FDA by the end of this year for approval to start selling lorcaserin in the U.S. Arena will have a very busy fall, as the results are scheduled for a full presentation at The Obesity Society’s scientific meeting in October. If the results withstand all that public scrutiny, the company hopes to entice a Big Pharma company with the muscle to put together a mass marketing campaign aimed at the roughly two-thirds of people in the U.S. who are considered overweight or obese.

“It’s an exciting time,” says Arena CEO Jack Lief. “It’s been a long time. I can’t wait.”

Any drug for obesity has to have a squeaky clean safety profile because it would potentially be taken by millions of people without an imminently life-threatening condition like cancer.
While the bar is high, obesity represents a potentially gigantic market. The leading treatment on the market is a four-decade old generic amphetamine, called phentermine, that most people avoid because it causes insomnia and high blood pressure.

Arena really has not taken any interim peeks at the clinical trial results while the study is ongoing, so it will have a motherlode of raw data to sift through for the first time. When I spoke with Lief and Arena’s chief scientific officer, Dominic Behan, last week, they were optimistic as usual that this study would confirm the safety and effectiveness they saw earlier this year in the 3,182-patient clinical trial known as Bloom. “We don’t expect any bad stuff to come out, because Bloom was so robust,” Lief says.

Based on those results, and assuming that Blossom provides the added confirmation the FDA wants to see, Arena has clearly been sharpening up its marketing strategy and competitive position against rival treatments from San Diego-based Orexigen Therapeutics (NASDAQ: OREX) and Mountain View, CA-based Vivus (NASDAQ: VVUS).

Both Arena and Orexigen underwhelmed investors …Next Page »

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San Diego’s Metabasis Therapeutics (NASDAQ: MBRX), which warned in May that it might have to cease operations, says it has hired a financial advisory firm to help the company evaluate its strategic options. Metabasis said earlier this week that Mark Erion, the company’s CEO, chief scientific officer, and director, has resigned to join Merck & Co. as a vice president overseeing work on diabetes and obesity. Erion was among a handful of executives remaining at Metabasis, which named chairman David Hale as executive chairman.

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San Diego’s Orexigen Therapeutics looked like just another biotech on the verge of collapse at the beginning of the year. Its CEO was diagnosed with a terminal case of leukemia and soon died. Three other senior executives had just quit. The company halted development of two experimental drugs to conserve cash.

Orexigen (NASDAQ: OREX) sought salvation from a long-running clinical trial, and didn’t find it. Results from a 793-patient study of obese patients on its experimental weight-loss drug fell short of what Wall Street was expecting, and the stock dropped 15 percent the next day to $5.10.

Then Mike Narachi saw something the market didn’t see at the time. Narachi, a former vice president in charge of Amgen’s multi-billion dollar anemia drug business, heard about the Orexigen CEO opening and decided to think about it. He spent six weeks doing his homework on the obesity market, Orexigen’s pipeline, competition, and its clinical trial results.

The market potential is clear. Obesity is one of the nation’s biggest public health problems, with two-thirds of U.S. adults considered overweight or obese. There’s not a lot of great pharmaceutical competition—Big Pharma has been gun shy about this field since Wyeth was burned so badly by the multi-billion legal settlements related to fen-phen heart damage, and Sanofi-Aventis failed to win approval two years ago for a drug that was linked to rare instances of suicidal thinking. In contrast, the Orexigen drug looked like a contender. It was made through a novel combination of two existing drugs with decadelong safety records, with no evidence of heart trouble or suicidal thinking. Orexigen owned 100 percent of the worldwide rights to a drug in the final phase of clinical trials.

He came to a conclusion: I want this job.

“Here was a company that needed leadership for a product in late-stage development that can address a huge unmet medical need,” Narachi says. “Most people misunderstood it. I saw it as a unique opportunity.”

The announcement of Narachi’s hiring crossed the wire March 31, when the company was limping along at $2.61 a share. Since then, Orexigen has looked like a different company. …Next Page »

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San Diego’s Senomyx (NASDAQ: SNMX) has a clearer road ahead in its development of flavor-enhancing ingredients, after the company said yesterday it will pocket a $10-million upfront payment as part of an expanded collaboration with Switzerland’s Firmenich. Senomyx, which is reporting its second-quarter earnings this morning, says its deal with the world’s largest private company in the flavor and fragrance business eventually could be worth as much as $34.5 million.

The two companies first began collaborating in January 2008, when Firmenich got access to novel ingredients Senomyx is developing to boost or block the taste of key flavors. By November, Firmenich agreed to a second deal to get commercial rights to a Senomyx sweetener that’s supposed to reduce the need for sucralose in beverages.

Yesterday’s deal gives Firmenich the right to co-develop and commercialize ingredients to enchance the taste of table sugar and two other sweeteners. The deal will provide $10 million to Senomyx within the first 20 days, and another $10 million after the first flavor ingredients wins regulatory approval, according to an SEC filing.

Investors liked the news enough yesterday to lift the value of Senomyx’ stock by 40 cents, or more than 14 percent, to close at $3.20 a share.

Senomyx spokeswoman Gwen Rosenberg tells me another significant aspect of the collaboration lies in the scope of its deal with Firmenich. Senomyx has disclosed, for example, that it has a partnership with Coca-Cola that covers Coca-Cola’s use of Senomyx sweetness enhancers in non-alcoholic beverages.

The Firmenich deal is more comprehensive. With a handful of exceptions, the deal provides Firmenich worldwide exclusive rights on the development and commercialization of Senomyx flavor enhancers for sucrose (table sugar), fructose, and various forms of rebaudioside (a natural sweetening ingredient) for all forms of foods and beverages. (The exceptions are non-alcoholic beverages, gum, sugar confections, and chocolate confections.)

As I explained in June, there’s a sweet receptor on the tongue that binds with sucrose. But additional nearby sites bind with other molecules to intensify the sweet flavor, enabling food companies to use less sugar without sacrificing flavor. As a result, the sweetness enhancers under development at Senomyx could become more crucial as overweight Americans focus on how much sugar they are consuming their diet.

Rosenberg says that Senomyx is optimistic about the second installment coming from Firmenich. That milestone, worth another $10 million, is due when Senomyx’ lead sweetness enhancer, a compound known as S6973, is ready for commercialization—which could come as early as the first quarter of 2010, she says.

While the deal is focused initially on synthetic flavor ingredients, a provision of the Firmenich deal enables the Swiss company to evaluate natural flavor ingredients for a limited period. According to Rosenberg, rebaudioside is a natural sweetener (derived from the stevia plant), but it is not widely used because it triggers some lingering off tastes. But by using its technology, she says Senomyx may be able to identify molecules that enhance the sweet flavor of stevia and minimize the side-effects.

CEO Kent Snyder will likely discuss details of the deal, along with the company’s second-quarter financial results,with analysts and institutional during a conference call set for 8 am Pacific today.

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Orexigen Therapeutics, the San Diego-based developer of an experimental obesity drug, said today it has raised $70.9 million through a stock offering. The company (NASDAQ: OREX) sold 10 million shares at $7.50 apiece, then subtracted underwriting discounts and expenses. Orexigen announced earlier in the week that three large clinical trials of 4,500 patients reached their goals, of helping patients lose weight or reduce blood sugar, cholesterol, and other risk factors.

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San Diego-based Orexigen Therapeutics dumped a boatload of information in the public domain this morning about clinical trials of its experimental obesity drug. Investors have been in a wait-and-see mode about this drug for months after arguing over the merits of one big trial, but they reacted positively to this new batch of data, sending the stock up 16 percent to $6.62 just after the opening bell.

Orexigen (NASDAQ: OREX) said today that all three of the big clinical trials of the drug in obese patients reached their goals in showing that the treatment helped people lose more weight than a placebo. The company also said that it found encouraging signs on secondary goals, like reducing cholesterol, and blood sugar levels, and helping patients develop slimmer waists. There wasn’t much in the initial announcement about side effects, although Orexigen said nausea was the most common side effect that caused patients to drop out of the studies, and that seven out of 4,500 patients in the trials had severe side effects that may have been related to the drug, including gallbladder inflammation, seizure, heart palpitations, and vertigo.

The drug, a longer-lasting form of two generic treatments known as buproprion and naltrexone, has now cleared enough hurdles that Orexigen plans to send off an application to the FDA in the first half of 2010 to start marketing it in the U.S. as Contrave. If the FDA agrees the drug is safe enough to reach the market, then it has a shot to tap into a market surely worth multi-billions in the U.S. Obesity rates in the U.S. have been skyrocketing for years, as a result of the deadly combo of the sedentary lifestyle and junk-food culture. About two-thirds of U.S. adults are now considered overweight or obese, putting them at risk for a litany of conditions such as heart disease, diabetes, high blood pressure, and arthritis. The cost to society of all this unhealthy weight gain is hard to measure because it’s intertwined with so many diseases, but a U.S. Surgeon General’s report in 2000 fingered it as responsible for about 9 percent of national healthcare spending.

“The results demonstrate the potential for Contrave to help patients in their battle against obesity,” said Mike Narachi, president and CEO of Orexigen, in a statement.

Before breathless commentators start turning too many cartwheels though, it’s worth a closer look at the data to see what kind of magnitude of weight loss researchers saw with Orexigen’s drug.

The FDA has given guidance to drugmakers that it typically likes to see …Next Page »

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San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) was trading just under $4 a share today, after the company priced its secondary public offering of 12.5 million shares yesterday at $4.17. Arena shares closed Tuesday at $4.67. Arena said last month that it had arranged $100 million in debt financing with Deerfield Management, a significant shareholder, that’s needed to complete final trials of its obesity drug, lorcaserin, and to carry the company through its new drug application review with the FDA. The company says its secondary stock offering was pursuant to a shelf registration filed in November. Arena is expected to raise approximately $52.1 million before expenses, with Piper Jaffray & Co. acting as sole underwriter.

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Medical device firm EndoGastric Solutions, based in Redmond, WA, and Redwood City, CA, has raised $7.5 million in funding, according to a regulatory filing. The company makes devices to combat heartburn and obesity, and previously raised $79 million in venture funding from the likes of MPM Capital, Advanced Technology Ventures, and DeNovo Ventures. EndoGastric was originally incubated at Scout Medical Technologies in Kirkland, WA.

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After reporting comprehensive findings from its major study of obesity drug lorcaserin 11 days ago, San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) said today it has arranged $100 million in debt financing with Deerfield Management, a significant shareholder.

That should provide the means for Arena to take the drug through the FDA drug review process. In a statement released this morning, Arena CEO Jack Lief says, “This funding will put us in a stronger financial position as we complete the lorcaserin Phase 3 pivotal program and prepare its NDA submission while advancing our various partnering discussions for lorcaserin and our earlier-stage drug candidates.” NDA stands for New Drug Application.

Deerfield Partner Howard Furst cited lorcaserin’s clean safety profile as “the single most important variable in the approval and broad usage of drugs” for the burgeoning population of overweight people in the U.S. In a comment that seemed to be aimed at investors, Furst added, “The value of Arena, however, goes beyond this important drug candidate to the company’s niacin receptor program with Merck, its diabetes program with Johnson & Johnson and its ability to discover, develop and partner additional compounds.”

Under terms of the credit facility, Deerfield, a New York-based healthcare investment firm, will provide Arena with $100 million, to be repaid within four years. The San Diego drug developer will issue Deerfield warrants for 28 million shares at a price of $5.42 a share.

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There was a lot of life sciences news over the past week in San Diego, with much of it coming out of the American Diabetes Association annual meeting in New Orleans.

—At a time when San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) doesn’t need more challenges, Denmark’s Novo Nordisk announced that liraglutide, its once-daily diabetes drug, is substantially better at controlling blood sugar in type 2 diabetes than Amylin’s exenatide, which is injected twice-daily.

—If Amylin Pharmaceuticals’ rivals are targeting the diabetes specialist, at least the San Diego biotech is a moving target. Amylin says the latest clinical data for the new formulation of its exenatide diabetes drug (which only has to be injected once weekly instead of twice daily) shows patients were able to maintain control over blood sugar for two years, helped them lose weight, and lowered their blood pressure.

—San Diego’s Orexigen Therapeutics (NASDAQ: OREX) posted new results of its late-stage drug for treating obesity, showing that 41.5 percent of patients on the drug lost 10 percent of their body weight. That compared with 20.2 percent who did as well taking a placebo.

—Another San Diego drug developer, Arena Pharmaceuticals, (NASDAQ: ARNA) says patients on its lorcaserin treatment for a year generally had reduced their risk of heart attacks.

—San Diego’s Anadys Pharmaceuticals (NASDAQ: ANDS) is cutting its workforce by 40 percent and focusing its remaining resources on its lead drug candidate for treating the hepatitis C virus. The company also says it’s raising $17.5 million.

—Trius Therapeutics, a San Diego biotech developing a new antibiotic against deadly MRSA bacterial infections, said a study showed 98 percent of patients on the lowest dose of its new compound achieved a clinical cure. 

—Raj Krishnan, a bioengineering Ph.D candidate at UC San Diego, began entering student entrepreneur and business contests as a way to raise money for Biological Dynamics, the cancer diagnostics company he co-founded. It worked. He has now won 13 awards, and his most recent win included a check for $40,000. Krishnan, 27, says his research is focused on technology to identify a key biomarker for almost every type of cancer.

—After getting a $20 million infusion from investors last month, San Diego’s Vical (NASDAQ: VICL) says it has enough resources to continue operating through the end of 2011, which should be enough time to complete its clinical study of an immune-stimulating therapy for metastatic melanoma. Vical also is developing a vaccine to prevent life-threatening cytomegalovirus infections in bone marrow transplant patients.

—Bothell, WA-based Sonosite (NASDAQ: SONO) says it’s acquiring San Diego’s CardioDynamics International (NASDAQ: CDIC) in a deal valued at about $10 million. Sonosite makes portable ultrasound machines and CardioDynamics makes noninvasive medical diagnostic tools for cardiovascular disease.

—San Diego-based Tocagen, which is developing gene therapy treatments for terminally ill cancer patients, was among three biotechs that raised cash recently. Tocagen has raised $10.8 million in an $11.2 million equity offering that began in September. The startup was founded in 2007 by Harry Gruber, who previously founded Gensia Pharmaceuticals, Viagene, Aramed, and Metabasis, among others.

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San Diego-based Arena Pharmaceuticals disappointed a lot of investors a couple months ago when its obesity drug didn’t help people shed as many pounds as hoped. But after combing through the data in greater detail, the company says it has evidence that its drug can help many patients lose weight, and that it leads to all sorts of other health benefits, like potentially lowering the risk of cardiovascular disease.

Arena (NASDAQ: ARNA) is presenting detailed results today from a clinical trial of 3,200 patients, known as Bloom, which compared its lorcaserin treatment to a placebo. The data being released today show that patients on the Arena drug for a year generally had lower blood pressure, lower cholesterol scores, improved blood sugar levels, and 30 percent lower levels of C-reactive protein in the blood—a marker for inflammation associated with higher risk of heart attacks.

The findings, which are being presented today at the American Diabetes Association annual meeting in New Orleans, could cause some investors to take another look at the prospects for lorcaserin, which was branded as a failure by many when the first hints of data were made public in March. The major finding of the study is that patients lost an average of 5.8 percent of their body weight on the drug, compared with 2.2 percent body weight loss in the placebo group. The FDA generally considers that a weight loss drug should be five percentage points better than a placebo—so on that score, Arena came up short.

Arena acknowledges that, but it’s trying to draw attention to a second FDA definition that gives the company reason for optimism that it will win approval for lorcaserin. If a drug helps twice as many patients lose 5 percent or 10 percent of their body weight compared to a placebo, that’s another valid definition for success, the FDA has said. On that count, Arena was a winner. About two-thirds of patients who stayed on the trial a full year lost 5 percent of their body weight, compared with one-third who did as well on a placebo. More than one-third of the patients on the drug lost 10 percent of their body weight, which was almost triple the rate among those on a placebo.

“This has an opportunity to be the drug of first choice,” says Arena CEO Jack Lief. “Our ability to tie all of these outcome measures together, with a well-tolerated drug, is something no one else has.”

Any drug that can help people lose significant amounts of weight with no serious side effects has a chance to be a big seller. Obesity rates in the U.S. have been skyrocketing for years, with about two-thirds of U.S. adults now considered overweight or obese, putting them at risk for a litany of other conditions like heart disease, diabetes, high blood pressure, and arthritis. The cost to society of all this unhealthy weight gain is hard to measure because it’s intertwined with so many diseases, but a U.S. Surgeon General’s report in 2000 indicates that obesity may be responsible for about 9 percent of national healthcare spending.

Arena has two primary competitors in the race to develop an effective new drug for this epidemic. One is San Diego-based …Next Page »

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