New England drug developers made headlines this week with funding news.

—My San Diego colleague Bruce took a look at Applied Proteomics, the five-year-old biotech startup co-founded by MIT-trained computer scientist Danny Hillis. The startup, which raised $22.5 million in funding in June, is developing technology that provides a 40-gigabyte snapshot of all the proteins circulating in a drop of blood.

—Radius Health, a Cambridge, MA-based startup developing treatments for osteoporosis, filed paperwork indicating its intent to raise $86 million in an initial public offering.

—Investing dollars in biotech and medical devices startups increased in 2011, but the volume of deals shrank, according to a report by PricewaterhouseCoopers and the National Venture Capital Association. Read more of my colleague Arlene’s recap.

—New Jersey-based Celgene (NASDAQ: CELG) continued its recent streak of deals with Boston biotechs, with a $15 million investment in Acetylon Pharmaceuticals, a startup funded by New England Patriots owner Robert Kraft. (That should be some consolation.)

—Waltham, MA-based Synchroneuron raised $6 million in funding from Morningside Technology Ventures—a milestone for founder Barry Fogel, who has been working for 15 years on a treatment for a movement disorder called tardive dyskinesia (TD).

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Cambridge, MA-based Radius Health, which is on a quest to enter the multibillion-dollar market for osteoporosis treatments, said today it has filed to go public. The company hopes to raise $86 million in the proposed offering. The IPO will be underwritten by UBS Investment Bank and Leerink Swann, and co-managed by Cowen and Company and Rodman & Renshaw.

Radius’s lead compound, BA058, is a new type of “anabolic,” or bone-building, drug. In early trials, patients have re-grown bone with little risk of developing hypercalcemia, a dangerous overload of calcium that can result from current treatments. If the drug proves effective in pivotal trials, which the company is running now, it could become a major contender in a very large market. A recent study by Global Industry Analysts of San Jose estimated that the annual market for osteoporosis treatments will reach $8.8 billion by 2015.

The current iteration of Radius’s drug is an injection, but the company is working on a more convenient dosing option—a patch it’s developing in a collaboration with 3M (NYSE: MMM). Using 3M’s “microneedle” technology, Radius developed a patch containing 360 tiny needles that deliver a full dose in about 15 minutes.

Radius last made news in May, when it raised a staggering $91 million and merged with an unlisted shell company in preparation for an IPO. The company’s investors include MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, the Wellcome Trust, HealthCare Ventures, Scottish Widows Investment Partnership, BB Biotech, Brookside Capital, Saints Capital, Nordic Bioscience, and Ipsen Pharma.

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When Ashleigh Palmer joined Boonton, NJ-based biotech company Unigene Laboratories as CEO in mid-2010, he faced a turnaround challenge that others might have considered way too daunting. The 30-year-old company was struggling to make money from a disjointed set of assets, which included a promising but, in Palmer’s view, under-marketed technology that could be used to turn injectable peptides—or protein-based drugs—into easy-to-swallow pills. Unigene was in debt and in need of a rescue. Furthermore, says Palmer, it had been managed by the two scientist-founders, who were brothers. “There’s the first warning sign,” Palmer says. “Family and business often don’t go well together.”

Wall Street has yet to be convinced that Palmer has what it takes to turn around Unigene’s fortunes. Unigene (NASDAQ: UGNE), which went public in 1985, was delisted in 1999 and pretty much left for dead by investors. On November 9, Unigene announced a net loss of $7.2 million for the third quarter ended September 30, on $3.4 million in sales. The company’s revenues included royalties from a nasal spray it developed to treat the degenerative bone disease osteoporosis—a product that that Unigene licensed to Maple Grove, MN-based Upsher-Smith Laboratories but that hasn’t been selling well due to competition.

The stock, as usual, barely budged—edging down 2 percent to $1 after the earnings announcement.

Palmer has been doing his best to get investors to focus on the good news. In conjunction with its earnings announcement, Unigene announced positive Phase 2 trial results on an osteoporosis drug it is developing with European drug giant GlaxoSmithKline (NYSE: GSK). The drug is an oral form of parathyroid hormone (PTH), the protein that’s the basis of Eli Lilly’s blockbuster osteoporosis injection teriparatide (Forteo). In the trial, Unigene’s drug produced a statistically significant increase in bone mineral density in the lumbar spine—a measure used to predict fracture risk. It was the result the companies were hoping to see.

Wall Street’s reaction? Crickets.

Then, yesterday, the company announced that an osteoporosis drug it was manufacturing as part of a partnership with Novartis (NYSE: NVS), Danish drug developer Nordic Biosciences, and Cedar Knolls, NJ-based Emisphere performed poorly in a late-stage clinical trial. Unigene has already received $13.7 million out of $18.7 million in potential payments from Novartis under a 2004 licensing agreement, and Palmer said in a statement that the setback would make little difference to the company’s turnaround effort. Still, it was enough to knock Unigene’s stock down by a dime.

As far as Palmer is concerned, the company’s relationship with GSK is the key element of his turnaround plan. GSK first partnered with Unigene in 2002 with the intention of developing a synthetic, oral form of PTH. But the first generation product didn’t work, and GSK lost confidence in Unigene, Palmer says. So shortly after he joined the company, Palmer and his team went to GSK and presented new data on … Next Page »

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It was a full and busy week for life sciences news in San Diego, with interesting advances in wireless health and a variety of deals. I’m planning at least one more report from the Wireless Health 2011 Conference, but in the meantime, here’s everything else.

North Carolina Gov. Beverly Burdue said yesterday that San Diego-based Sequenom (NASDAQ: SQNM) plans to build an $18.7 million molecular diagnostics clinical laboratory in the Research Triangle Park. Tar Heels state officials offered the diagnostics company as much as $2.3 million in incentives if Sequenom can meet certain hiring and investment goals. Sequenom, which currently has more than 280 employees in San Diego, would nearly double in size, as the North Carolina lab is expected to create 242 jobs over the next five years. Sequenom has been working to commercialize its noninvasive test for Down syndrome, which identifies a fetal marker for the condition that circulates in the maternal bloodstream.

—The Wireless Health 2011 Conference, a scientific and technical symposium, continues through today at the Hilton La Jolla Torrey Pines. In a keynote presentation earlier this week, Qualcomm (NASDAQ: QCOM) CEO Paul Jacobs demonstrated a mobile app developed by San Francisco-based AliveCor that turns an iPhone into an electrocardiograph device. “The future is already here,” Jacobs said, quoting the sci-fi writer William Gibson. “It’s just not very equally distributed.” AliveCor raised $3 million in first round venture funding earlier this year from Qualcomm Ventures, Burrill & Co., and the Oklahoma Life Sciences Fund.

—The price of shares in San Diego-based Illumina plunged by 32 percent after the company posted disappointing third quarter sales of $235 million, about $40 million short of expectations. Illumina, the market leader in high-speed gene sequencing instruments, also withdrew its 2011 sales forecast “due to the many market uncertainties.” Illumina’s stock, which had been trading around $40 a share, fell to $27.08 on the news last week. Illumina (NASDAQ: ILMN) shares closed yesterday at $26.04.

—I sat down with the chairman and CEO of PatientSafe Solutions, Jim Sweeney, who talked about the wireless healthcare company’s PatientTouch device, a souped-up Apple iPod Touch that’s been extensively modified to help … Next Page »

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This week was full with news of progress from New England drug developers.

—Waltham, MA-based antibody drug maker ImmunoGen (NASDAQ: IMGN) sold 7 million shares of stock at $12 apiece. The company had $115.8 million in cash on hand at the end of March, a quarterly report showed.

—Biogen Idec (NASDAQ: BIIB) of Weston, MA, said it received a positive opinion from the committee of the European Medicines Agency, which could help pave the way sales in Europe of fampridine (Fampyra) as a new treatment for multiple sclerosis. The drug is expected to be cleared in about two months, Biogen said.

—My colleague Luke took a look at Cambridge, MA-based Bluebird Bio, a developer of gene therapies that is getting a lot of attention for its two lead programs. One is a drug focused on beta-thalassemia, a genetic disorder in which patients don’t produce enough hemoglobin; the other is a treatment for the brain disorder childhood cerebral adrenoleukodystrophy.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) nabbed FDA approval to market its drug telaprevir (Incivek) in the U.S. as a treatment for hepatitis C. The protease inhibitor can be used as a first-line treatment or for patients who haven’t responded well enough to other treatments. Earlier this month, the FDA approved a competing treatment from Merck  for the liver-damaging disease, which affects 3 million people in the U.S.

—Radius Health of Cambridge took in $91 million in new financing to help advance pivotal Stage 3 clinical trials of its osteoporosis treatment, and merged with an unlisted shell company (“MAC”), to take on the status of an SEC-reporting company and apply to be listed on a national stock exchange. The deal included $66 million in equity funding for Radius, which is developing a bone-building drug, called BA058, modeled after human parathyroid hormone-related protein.

—Casenet, a Bedford, MA-based healthcare software maker, added $3.3 million in equity funding and increased the size of its current financing round to a targeted $15.8 million.

—Cambridge-based drug developer Proteostasis inked a strategic alliance with Ireland-based Elan Pharmaceuticals to develop treatments for neurodegenerative diseases like Parkinson’s, Huntington’s, and multiple sclerosis. Elan gave $20 million initially and could put another $30 million into Proteostasis over the next five years. in return for a 24 percent stake in Proteostais, a seat on its board of directors and scientific advisory board, and the first chance to exclusively license new drug compounds from the collaboration.

—Xconomy New York editor Arlene Weintraub talked to  Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) CEO John Maraganore, who said the company’s drug for treating liver cancer could make a big splash at this year’s American Society of Clinical Oncology (ASCO) conference on June 4. The company has more safety data on the drug than it did last year, with one of the patients in the trial having been on the drug for a year.

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Today marks a major milestone in Cambridge, MA-based Radius Health’s long quest to enter the multibillion-dollar osteoporosis market. The company announced that it has raised $91 million in a third financing round, which includes $66 million in equity. What’s more, upon the closing of the financing, Radius merged with an unlisted shell company (“MAC”), so that it can take on the status of an SEC-reporting company and apply to be listed on a national stock exchange. The financing will be used to complete pivotal Phase 3 clinical trials.

CEO C. Richard Lyttle says Radius was able to make a convincing case to investors that its treatment will break new ground in osteoporosis, the gradual loss of bone that affects many aging people, especially women. “Investors want to put money towards products with really good data behind them, and we had Phase 2 data showing this drug is able to build bone in women,” he says. “We believe we’ll be able to offer women a new agent to treat osteoporosis.”

Radius is developing a novel “anabolic,” or bone-building drug, called BA058, which is an analog of human parathyroid hormone-related protein. In early studies of the drug—which Radius is formulating both as an injection and a skin patch—patients have re-grown some bone, while facing little risk of hypercalcemia, or too much calcium in the blood, which can be a side effect of current treatments.

The treatment is so promising that Radius has had little trouble raising cash in what has been an extremely challenging fundraising environment for most life sciences companies. Prior to today’s financing, the company had raised $106 million in venture capital from an A-list group of investors including MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, the Wellcome Trust, HealthCare Ventures, and Scottish Widows Investment Partnership.

The new round includes those investors, along with newcomers BB Biotech, Brookside Capital, Saints Capital, Nordic Bioscience, and Ipsen Pharma. It also includes a commitment to a $25 million loan facility from GE Capital, Healthcare Financial Services, and Oxford Finance. Nordic will also manage the Phase 3 trials of BA058—a coup, says Harvey, because Nordic is a renowned leader in osteoporosis, having been involved in trials of Amgen’s (NASDAQ: AMGN) recently approved denosumab (Prolia) and other osteoporosis treatments.

No doubt those investors were attracted to what is becoming an incredibly rich market opportunity. The aging of the population has led to a rapid increase in osteoporosis around the world. According to a recent study by Global Industry Analysts of San Jose, the annual market for osteoporosis treatments will reach $8.8 billion by 2015, even though many of the most popular treatments are losing their patent protection and going generic. Radius’s CFO, Nick Harvey, points to a Cowen & Co. report estimating … Next Page »

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Big name biotechs in New England made news this week with revenue reports, clinical results, and news on licensing agreements.

—Cambridge, MA-based Ariad Pharmaceuticals (NASDAD: ARIA) said it extended licenses to its cell-signaling regulation technology to three groups, each of which will use it for different purposes: Houston, TX Bellicum Pharmaceuticals (experimental cancer vaccine and cell therapies), Washington, DC-based ReGenX Biosciences (gene therapies), and Mountain View, CA-based Clontech Laboratories (the research market).

—Boston-based clinical informatics firm Humedica raised $20 million in equity-based finding, an SEC filing revealed. The startup came out of stealth mode in September 2009, after raising $30 million the year before from investors such as Bain Capital Ventures, General Catalyst Partners, North Bridge Venture Partners, and the investment bank Leerink Swann.

—Pieter Muntendam, CEO of Waltham, MA-based BG Medicine (NASDAQ: BGMD), talked to my colleague Ryan about the company’s long road to going public and its diagnostic product for assessing the prognosis of heart failure patients.

—Amgen (NASDAQ: AMGN), a Thousand Oaks, CA-based biotech with research operations in Cambridge, said its experimental osteoporosis drug met its goal of improving bone mineral density in a study of 400 postmenopausal women. The company said the treatment, AMG785, beat a placebo and two comparison drugs after 12 months of follow-up, and that side effects were “generally balanced” between patients on the new drug and in the control groups.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) reported increased first quarter revenues and new information on its oral treatment for multiple sclerosis on Thursday, sending its shares up more than 22 percent to $105.83 as of 10:23 am Eastern time on Thursday. First quarter revenues were up 9 percent to $1.2 billion, thanks in part to sales of its existing MS treatments. Biogen also gave investors more information on a call about the experimental oral MS drug, dimethyl fumarate (BG-12), than it did when it first announced clinical results.

—Corindus of Natick, MA, and Royal Philips Electronics said they agreed to work together to get Corindus’ minimally invasive, robotics-based treatment for blocked arteries in Philips’ cardiology products. Philips will take a minority stake in Corindus as a result.

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The financial crowd who follows Amgen may be talking all about dividends or techniques to boost the stock through share buybacks, but the medical and scientific world will be chirping today about an interesting new finding the company has made for treating osteoporosis.

Amgen (NASDAQ: AMGN), the Thousand Oaks, CA, biotech giant with R&D operations in Seattle, South San Francisco, and Cambridge, MA, said today an experimental drug met its goal of improving bone mineral density in a study of 400 postmenopausal women. Details are being saved for a medical meeting, but Amgen said its drug, AMG785, beat a placebo and two comparison drugs, after 12 months of follow-up. The rate of side effects was “generally balanced” between those patients on the new drug and those in the control groups, Amgen said.

The new treatment, being developed in collaboration with Belgium-based UCB, will now advance into the third and final stage of testing, Amgen said.

“Despite available osteoporosis therapies, there remains a significant need for additional treatment options that form new bone in women with postmenopausal osteoporosis,” said Roger Perlmutter, Amgen’s executive vice president of R&D, in a statement.

Amgen made the AMG785 announcement as its management team is meeting with analysts in New York to talk about the company’s long-term financial outlook. After years of prodding from shareholders, Amgen confirmed in a separate statement that it will introduce its first dividend for shareholders, starting next quarter.

While dividends are usually for old fuddy-duddy stocks for widows and orphans, Amgen has sought to hold onto some of the perception that it still has high growth potential. And Amgen has generated a lot of attention in the past year for its new bone treatment denosumab, which is now FDA-approved for treating osteoporosis and cancer-related bone fractures. The company projects that drug in its two marketed forms will generate $3 to $4 billion in sales by 2015.

But while denosumab works to stop the excessive breakdown of bone, the new drug, AMG785 is designed to work differently, so that the body can build up stronger, more dense bone material, as Amgen chief medical officer Sean Harper explained in an interview earlier this year. If the new drug passes the final stage of clinical trials, Amgen could be in position to capture a bigger share of the $9 billion-plus osteoporosis market as some older drugs turn generic. An estimated one out of five women over 50 in the U.S. have osteoporosis.

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The San Francisco Bay Area has a storied tradition as the birthplace and leading hub of biotechnology, but something curious has happened the past couple years. Most of the scientifically groundbreaking, medical-textbook rewriting, financially lucrative new biotech drugs of the 21st century are coming from somewhere else.

This dawned on me last week as I started thinking about the 20-year outlook for the Bay Area life sciences cluster, in advance of the Bay Area Life Sciences 2031 event I’m organizing in San Francisco on Wednesday evening. It forced me to think about the really innovative drugs that still have a chance to generate billions of dollars in revenue two decades from today, that will help people live longer and better lives, and that are blazing new scientific trails. I’m talking about drugs that are a scientific, clinical, and business trifecta—drugs like Gleevec, Avastin, Herceptin, and Enbrel.

Plenty of molecules in the hopper today have that kind of potential, but for the purposes of this subjective parlor game I wanted to focus on the ones that have generated proof through pivotal clinical trials, and have either recently won FDA approval or are clearly on the verge of approval. That makes for a pretty short list:

• Vertex Pharmaceuticals’ new drugs for hepatitis C and cystic fibrosis

• Human Genome Sciences’ treatment for lupus

• Dendreon’s immunotherapy for prostate cancer

• Seattle Genetics’ “empowered antibody” for rare lymphomas

• Amgen’s antibody for osteoporosis and cancer

• Plexxikon and Roche’s genetically tailored treatment for melanoma

• Genentech’s souped-up version of Herceptin for breast cancer

A couple of things jump out at me right away. Of these eight new molecules, two are coming from Boston, two are from Seattle, one is from Washington, D.C., one is from greater Los Angeles, and only the last two are from the San Francisco Bay Area. These products are important not just for shareholders, patients, and scientists, but also for their respective regions, because they stir up … Next Page »

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Deep in the wild, frozen woodlands of Michigan’s Upper Peninsula, it seems that even the scientists are a different, heartier breed of human. A few years ago, Seth Donahue, an associate professor in biomedical engineering at Michigan Technological University in Houghton, MI, decided to gather a few of his bravest grad students and sneak into caves occupied by hibernating black bears.

Yes, those kinds of black bears. The ones with all the fur … and claws … and teeth.

But these bears also have something else that Donahue was curious about—something that makes the risks associated with rousing a sleeping bear worth it. He wondered how bears could go to sleep for 4-6 months every year and not suffer any bone loss, given that humans who are immobilized by age or infirmity begin to lose bone after only a few weeks. You won’t see a hibernating bear wake up in the springtime with osteoporosis. So … very quietly … very carefully, Donahue and his team took blood samples to find out why the bears’ bones remained so strong despite their long periods of inactivity.

The secret, it turns out, is parathyroid hormone (PTH), a molecule that helps regulate the body’s calcium stores. Humans have it too, but the bear version differs from humans’ in the number of amino acids, which scientists speculate is one reason bear bones are superior. The next step was to figure out how to bottle that stuff up and make it helpful to an aging human population, with aging aching backs.

And here’s where a bear hunter steps into our story. Well, a bear hunter who also has a … Next Page »

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Aursos, a Kalamazoo, MI, company that uses a protein found in black bears to try to prevent bone loss in people who suffer from osteoporosis, has raised $40,000 toward a $230,000 round of debt, rights and securities, according to VentureWire. In March, VentureWire reported the company raised $60,000 toward a $740,000 equity round. Previously, the company has received $200,000 from the Michigan Pre-Seed Capital Fund. The company is aiming to raise $15 million in Series A, according to VentureWire. Aursos is developing parathyroid hormone (PTH) treatments for osteoporosis. Found in black bears, PTH allows the animals to remain immobile during long periods of hibernation while still retaining bone strength. Investors in the company also include Ann Arbor Spark, Apjohn Ventures Fund, and Michigan Economic Development Corp.

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Quite a few Seattle biotechies are quietly gearing up for the always-important American Society of Clinical Oncology meeting from June 4 to 8 in Chicago. Combine that with a holiday weekend, and the local life sciences news was a little light for Xconomy Seattle.

—One of the big national headlines this week came when Amgen (NASDAQ: AMGN) won FDA approval, ahead of schedule, to start selling denosumab (Prolia) for women with osteoporosis. This is big news for the world’s largest biotech company. But it’s not the end of the story. The company is also vying for FDA approval to market the product for cancer-related bone loss, a quest that one of Amgen’s local scientists has been pursuing for about 15 years.

—SonoSite (NASDAQ: SONO), the Bothell, WA-based maker of portable ultrasound machines, made an important strategic move last week when it gobbled up Toronto-based Visualsonics. CEO Kevin Goodwin explained in detail what this new technology will mean for portable ultrasound, and how the company plans to use the new capabilities to crack open some new markets.

—Sometimes a startup is born after a couple old friends bump into each other after years of going their separate ways. That’s how Seattle Sensor Systems got an infusion of new vision and enthusiasm early this year, when Dendreon veteran Carole Spangler re-connected with UW researcher Clem Furlong on a portable technology for spotting pathogens.

—Genomics pioneer J. Craig Venter made international news a couple weeks ago when he engineered the first bacterial cell with an entirely synthetic genome. But he actually had a lot of help. One of the key players he relied on behind the scenes was a privately held company in Bothell, WA, called Blue Heron Biotechnology.

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Amgen (NASDAQ: AMGN) has received clearance from the U.S. FDA to start selling denosumab (Prolia) as a treatment for women with osteoporosis. The drug, an injection taken every six months, works to decrease the destruction of bone and increase bone mass and strength, according to an FDA statement. The drug was approved ahead of schedule, as the agency’s deadline to complete its review was July 25. Amgen is also seeking FDA approval of the new drug for cancer-related bone loss, another potentially big market that I described in detail back in an October 2008 feature.

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This week we were jamming on our big event on the 20-year outlook for Seattle’s life sciences hub, but we still found a way to squeeze in a lot of news and features.

—Biotech pioneer Chris Henney offered an insightful and entertaining talk about how to invest in biotech at a recent speech before the CFA Society of Seattle. I included his six tips on how to spot a winning biotech in last week’s roundup, but that piece didn’t include the sequel on the five red flags investors should watch out for. The In Vivo Blog did a fun follow up on this story, too.

—If Seattle wants to grow as a biotech hub over the next 20 years, it could use a few more bars, and less university red tape. That’s according to Stephen Friend, the Rosetta Inpharmatics founder who’s now trying to ignite an open source movement for biology, in comments he made at the Xconomy event Monday evening on the 20-year outlook for Seattle life sciences. I summed up some of the other great insights I heard from his fellow panelists Ben Shapiro and Steve Gillis, and also posted a big photo gallery here that captured the energy in the room.

—Kirkland, WA-based Pathway Medical Technologies is one of the big success stories of the past year in the local medical device community, but even it has had to endure a few lessons from the school of hard knocks. CEO Paul Buckman offered a candid look at how the company is adjusting to the new reality of the medical device business.

—Amgen (NASDAQ: AMGN), the giant biotech company with 900 employees in Seattle, said its experimental drug for osteoporosis, denosumab (Prolia), was delayed by FDA requests for more information. That didn’t seem like much of a big deal at first glance because the FDA didn’t ask for any new clinical trials, and it has been missing a lot of deadlines lately. But then Amgen said yesterday in its earnings release that the FDA is asking for more clinical trials to demonstrate safety of denosumab for cancer patients. Ouch.

—Sonosite, the Bothell, WA-based maker of portable ultrasound machines, got a lift this week when it settled all of its patent litigation with General Electric over ultrasound devices that weigh less than 10 pounds. Sonosite (NASDAQ: SONO) will get $21 million upfront and an undisclosed royalty on sales of GE’s portable ultrasound machines until 2016.

—Seattle-based Calistoga Pharmaceuticals released some preliminary, but encouraging, results over the weekend from a small leukemia trial. The company’s experimental drug was able to shrink tumors for 29 percent of patients in the trial, but based on some secondary findings, the company thinks it might be able to do much better than that in combination with other treatments, or with longer follow-up.

—San Diego-based Fate Therapeutics, the company co-founded by a group of top stem cell scientists that includes Randall Moon of the University of Washington, announced over the weekend that it has taken a big step toward “industrialized” production of stem cells for drug discovery. The advance for inducing adult cells into a pluripotent, stem-cell like state, came from the lab of Fate co-founder Sheng Ding, a professor at The Scripps Research Institute in San Diego.

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Amgen, the world’s largest biotech company, said today that the FDA has delayed its application to market denosumab (Prolia) for treatment of osteoporosis. The FDA requested that Amgen (NASDAQ: AMGN) include a risk evaluation and mitigation strategy, and more information on the company’s safety surveillance plan for when the drug is on the market. The agency didn’t ask for additional clinical trials of the drug, Amgen said.  The company expects to hear a separate response on its application to market denosumab for bone loss in prostate cancer and breast cancer patients. “We are confident that we can quickly respond to the FDA’s requests,” said Roger Perlmutter, Amgen’s head of R&D, in a statement.

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One of the inconvenient truths of the biotech and pharmaceutical industry is that only about one out of every 10 drug candidates good enough to enter clinical trials passes all the tests to graduate as an FDA-approved therapy. Every major drugmaker is searching for ways to boost that success rate, and yesterday I got an interesting glimpse into how the world’s largest biotech, Amgen, thinks about how to raise its game.

Amgen is based in Thousand Oaks, CA, but has 900 employees in Seattle and about 200 more in Cambridge, MA, many of whom play critical roles in the perilous early steps of R&D where a lot of time and money get wasted. I got an overview from Amgen’s senior vice president of translational sciences, Joe Miletich, while he was in Seattle this week to meet with employees (and briefly enjoy the view of Elliott Bay from the office CEO Kevin Sharer sometimes uses).

Amgen (NASDAQ: AMGN) had $15 billion in revenues a year ago, largely from products for patients with anemia, autoimmune diseases, and cancer. About one-fifth of that revenue, $3 billion, was poured into the R&D budget. Much has been written about how Amgen coasted on the success of its first two blockbusters in the 1990s, acquired another one in 2002 from Seattle-based Immunex, but has more recently sought to re-ignite its innovation engine, particularly for cancer drugs, this decade under R&D boss Roger Perlmutter, a former Merck executive and University of Washington immunology professor.

Since it often takes a decade or more to develop a new drug, this effort is still a work in progress, but Amgen now has 50 drugs in the pipeline from the late discovery stage through Phase III clinical trials. Amgen has organized the pipeline with three key guys who report to Perlmutter from beginning to end. David Lacey runs the early discovery, Miletich handles translational steps from there through early-stage clinical trials, and Sean Harper is responsible for late-stage clinical trials.

Amgen's Joe Miletich

Miletich was formerly a professor of internal medicine and pathology at Washington University in St. Louis and a Merck executive. His team in the middle of the R&D machine takes drugs after they’ve graduated from the discovery phase, and then runs them through a battery of genetic tests, cell-based tests, animal tests, models of disease, and biomarker studies to see which types of people might respond to such a treatment. The goal is to test whether the candidates are safe, and whether there’s “evidence of biological impact” that gives the company “a high degree of certainty” on whether the drug is actually hitting the desired target and doing what it is supposed to do in people, he says. If done right, this work is supposed to answer which of those 50 drugs on the roster, and which of the 6 to 8 new ones that enter human trials each year, are truly worthy of putting major-league resources behind in the ultimate proving grounds of Phase II and III clinical trials. The rest of the candidates, Miletich says, may need more long-term observation in people, while some should be killed early before too much money is wasted, he says.

This isn’t revolutionary stuff—it’s what other companies do, Miletich acknowledged. But it is an effort to weave together basic research and clinical development in a closer way than had been done in the past, when research might just hand over a drug to development to see if it worked, Miletich says. He says this more integrated, or “translational,” approach should pay off directly by raising Amgen’s success rate above the usual industry rule of thumb.

“Over the next five years, I’d like to see us have about a 20-30 percent higher success rate over the historical average,” Miletich says.

That sounded pretty bold, but Miletich was quick to throw in qualifiers. There are … Next Page »

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Amgen (NASDAQ: AMGN), the world’s largest biotechnology company, said today that its lead experimental drug, denosumab, reached all its goals in a clinical trial of more than 2,000 women with breast cancer. Women with breast cancer often have tumors spread to their bones, and the drug, “dmab,” was able to delay the time it took for that damaging effect to occur, when compared with Novartis’ zoledronic acid (Zometa). The Amgen drug, which is also vying for FDA approval as an osteoporosis treatment, has been studied for more than a decade as a cancer drug at Amgen’s Seattle research center, as I described in a feature in October.

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Soteira, a Natick, MA-based medical devices startup, has raised $6.6 million of a proposed $12 million round of private equity financing, according to an SEC filing. The filing does not list the investors in the round, and Soteira CEO Larry Jasinski couldn’t be reached at his office yesterday or today. The company is developing a system for treating vertebral compression fractures caused by osteoporosis, cancer, or traumatic injuries, according to the website of one of its investors, Fletcher Spaght Ventures. Soteira does not appear to have an active website.

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Amgen, the world’s biggest biotech company, is cutting 100 jobs at a drug manufacturing site in Bothell, WA, Xconomy has learned. This round of cuts will leave Amgen with about 70 people still working in Bothell, and a total workforce in the state of just under 900 people, company spokeswoman Carol Pawlak confirmed.

Amgen, which has about 17,000 employees worldwide, decided to merge the work being done in Bothell—for manufacturing small batches of biotech drugs for use in clinical trials—into a larger facility at Amgen headquarters in Thousand Oaks, CA where that same work is done. Amgen (NASDAQ: AMGN) will keep an adjoining facility in Bothell that works to continuously refine manufacturing processes of biotech drugs, which are made in living cells using fermentation-style processes.

The cutbacks are not part of any larger systemic cost-cutting at Amgen, Pawlak says. Amgen endured the worst year in its history in 2007, losing $29 billion in market value that year, as the FDA warned physicians about the risk of heart attack, stroke and death found in trials of patients who took its best-selling anemia drugs. Those concerns have largely faded from public view in the past year, and now Amgen is feverishly working to win FDA approval for an osteoporosis drug called denosumab, which has shown impressive ability to reduce bone fractures in clinical trials, and which analysts predict has potential to be a $1 billion-a-year hit.

“This was a difficult decision for us,” Pawlak says. “When we looked at the two facilities we had for clinical trial manufacturing, it made the most sense to do that work in one place.”

The workers in Bothell are not being offered transfers to California, although they do have an opportunity to apply for other jobs within Amgen, Pawlak says. They are expected to be let go in July, will receive a minimum of six months worth of salary as severance, a year of paid health insurance, and assistance in finding new jobs, Pawlak says.

Amgen just announced the decision internally yesterday, and hasn’t yet decided whether to sell or sublease the Bothell facility used for biotech drugmaking, Pawlak says. Amgen first came to Washington in 2002, when it acquired Seattle-based Immunex for $10 billion, and obtained rights to its crown jewel, etanercept (Enbrel) for autoimmune diseases. Enbrel is now the world’s biggest-selling biotech drug with more than $5 billion in worldwide annual sales for Amgen and its partner, Madison, NJ-based Wyeth.

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It was a fairly quiet week for Northwest deals, with activity in biotech, software, and mobile. Let’s see if the sunny weather brings more action.

—Seattle Genetics (NASDAQ: SGEN), a Bothell, WA-based developer of cancer drugs, provided a worldwide license to use its technology to Millennium: The Takeda Oncology Company in exchange for $4 million upfront, as Luke reported. The technology combines antibodies that seek out tumors with toxins to make them more potent. Millennium will pay to develop the drug candidate, as well as a mid-single-digit percentage royalty on sales if it turns the technology into a product.

—Luke reported on the ongoing partnership between biotech startup VLST and Danish pharmaceutical giant Novo Nordisk in the South Lake Union neighborhood of Seattle. The original deal, announced in December, brought in $12 million to VLST in exchange for Novo gaining the rights to develop drugs against cell targets VLST has discovered for autoimmune and inflammatory diseases.

—Seattle-based Swype, which makes text-input software for mobile devices, raised $1.3 million in funding from angel investors and company management. Swype’s technology lets people enter text by tracing a path on a touch-screen keyboard using a stylus or their fingertip.

—Bellevue, WA-based Onehub, a maker of collaborative software for business users, closed about $600,000 in funding as part of an ongoing $1 million fundraising round. The investors and other terms were not disclosed. Onehub, founded in 2007, has developed a Web-based application that helps companies share information and manage projects.

—MDRNA (NASDAQ: MRNA), a Bothell, WA-based developer of drugs that use RNA interference technology, sold its assets related to a nasal spray drug for osteoporosis to Par Pharmaceutical, as Luke reported. MDRNA receives an undisclosed cash payment upfront, as well as a double-digit percentage royalty on sales of the product. Par will assume the manufacturing and operating costs related to the drug.

—Luke reported that Cambridge, MA-based Genzyme (NASDAQ: GENZ, the world’s largest maker of drugs for rare genetic diseases, is moving into cancer and multiple sclerosis by acquiring three drugs from German drugmaker Bayer AG—including one, Leukine, that gives Genzyme its first foothold in Seattle. Leukine, which is made in Seattle and Bothell, WA, boosts production of white blood cells for chemotherapy patients. Genzyme is not paying upfront fees, but expects to take over manufacturing of Leukine at a new factory in Snohomish County next year.

—Seattle cloud computing startup Skytap’s $7 million funding round from last month was worth a closer look. I spoke with CEO Scott Roza and director of product management Ian Knox about the financing, which came from the company’s existing Seattle-area investors Ignition Partners, Madrona Venture Group, and WRF Capital. Roza and Knox also touched on Skytap’s strategy as it prepares to take on big players in the cloud like Amazon, Google, and EMC.

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