—San Diego’s Amylin Pharmaceuticals says Bydureon, its new once-a-week drug for treating Type 2 diabetes can hit the market as early as next month, after the FDA cleared Bydureon. The FDA rejected the Amylin’s drug twice before. An estimated 26 million people in the United States, or roughly 8 percent of the population, have type 2 diabetes.

—San Diego’s life sciences sector has expanded since 2009, with employment increasing by more than 5,550 jobs, or 15 percent, over the past two years, according to a new economic report from Biocom, the local industry group. The comprehensive study counted more than 1,700 life sciences companies with a total of 41,937 employees throughout San Diego County in 2011, and says those numbers are expected to grow over the next two years.

—The FDA gave its approval to Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), which has substantial operations in San Diego, for a new drug called Ivacaftor (Kalydeco), developed to treat a rare form of cystic fibrosis. The twice-a-day pill targets about 4 percent of the 30,000 patients in the U.S. with cystic fibrosis.

—Johnson & Johnson’s reorganized R&D operation in San Diego, now known as Janssen Healthcare Innovation, is trying an experiment in innovation by creating an incentive prize challenge. Janssen is offering a total of $250,000 for technology that helps improve care for patients who have just been discharged from a hospital.

—The folks who produce the quarterly MoneyTree report on venture capital funding just released a deeper dive into the details of life sciences investments. The survey shows that VC funding for life sciences increased 21 percent nationwide in 2011, with a total of $7.5 billion going into 785 deals. San Diego ranked third among metropolitan regions in terms of capital invested in the fourth quarter. The top five are Bay Area ($498 million), Boston ($384 million), San Diego Metro ($193 million), NY Metro ($98 million), and Orange County ($97 million

—Optimer Pharmaceuticals (NASDAQ: OPTR) CEO Pedro Lichtinger outlined his plans for expanding the market for the company’s first product, the antibiotic fidaxomicin (Dificid), as a preventative therapy for hospital patients at risk for a nasty intestinal infection called C. difficile. San Diego-based Optimer is planning a clinical trial to prove the drug can help prevent severe diarrhea in patients undergoing bone-marrow transplants.

—A tweet from Bob More of Frazier Healthcare Ventures prompted Luke to delve into the importance of character among life sciences leaders in his BioBeat column. “Politics pretty similar to backing CEO’s,” More said. “Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,”

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In Michigan, technology spun out of the University of Michigan is firmly entrenched in the startup success stories that get the most press: HandyLab, Accuri Cytometers, and the like. What’s less publicized is the key role Wayne State University’s technology has played in major companies like Asterand and the California-based SciClone Pharmaceuticals.

Wayne State is particularly renowned for its contributions to chemical technology, and, earlier this month, the university hired Harl Tolbert—a former pharmaceutical executive with an extensive business development, licensing, and IP management background—as its associate vice president of technology commercialization tasked with building relationships with startups.

“Once upon a time, I wanted to be a researcher,” Tolbert says. “Then I became drawn more to the business part of science. I made my way out of the lab to a medical clinic in Illinois, and that whet my appetite for understanding how science, medicine, and business intersect.”

Tolbert comes to Wayne State after working in sales and business development at Abbott Laboratories and Pierce Chemical, both located in Illinois. When a job opened up in the technology transfer office at Tulane University, the Louisana native jumped at the chance to return to his home state and raise his children closer to family. Then, about a year later, Hurricane Katrina hit.

“We decided to leave New Orleans,” Tolbert says. “It was really painful, but everything was so uncertain. We didn’t know if we’d be able to rebuild our home or even re-occupy our neighborhood.”

He and his wife had a pact to relocate to the first city that offered both of them a job, and that ended up being Rochester, NY. Tolbert served as the associate director for biological sciences in the University of Rochester Medical Center’s Office of Technology Transfer before landing the job at Wayne State.

Though Tolbert was only slightly familiar with Detroit before accepting his position, he was very familiar with Wayne State, thanks to mentors throughout his career who had intimate ties to the university.

“Wayne State has a reputation for great achievements in chemistry,” he adds.

Tolbert says he plans to increase the school’s efforts to commercialize its technology by pitching both fresh technology and older technology to startups, particularly those in the realm of life science applications that involve human cells or tissue. He’s also seeking ways to develop technology despite the relative lack of funding that university research typically receives, such that the technology is “one or two steps” beyond the earliest stages.

“There’s a need for more bridge funding,” Tolbert says. “That’s true for all universities, and it’s true for Wayne State.”

One advantage Wayne State’s Office of Technology Transfer has is that it’s located in TechTown, the university’s startup incubator and a hub for local innovation. Tolbert imagines that his proximity to TechTown’s entrepreneurs will lead to “a lot of brainstorming in the hallways,” and the chance to not only interact, but keep tabs on companies that are interested in licensing Wayne State’s technology.

“We want to work with more startups in Detroit and the Southeast Michigan region,” Tolbert says. “Entrepreneurs tend to be a little more receptive to early-stage technology. We just have to be creative in how we engage them so that we can help them, and they can help us.”

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Employment in San Diego’s life sciences sector grew by 15 percent over the past two years, as biopharmas, medical device companies, and other employers added roughly 5,550 jobs here—raising employment in the sector to 41,937 in 2011, according to a report released today by Biocom. The report says overall employment in San Diego increased by 1.1 percent over the same period, gaining about 20,600 jobs to reach 1.83 million in 2011.

The 40-page economic study says San Diego’s life sciences cluster also is expected to outpace the nation in terms of job growth and economic impact over the next two years, as another 2,770 jobs are added by 2013. A broader snapshot that includes life sciences companies in neighboring Orange, Riverside, and Imperial Counties projects the region will add more than 6,000 workers over the next two years.

Despite a significant decline in venture capital funding, the report says the four-county region of Southern California will continue to retain its high standing and competitive advantage in the life sciences. By 2013, there will be 70 percent more jobs in the life sciences in these four counties than the national average.

While venture capital funding is a key indicator of entrepreneurial activity and business formation, the report says the sharp decline in Southern California VC investments, from $1.1 billion in 2007 to $553 million in 2010, reflects the severe economic downturn and other industry trends underway nationwide.

San Diego’s strength was especially apparent in federal funding for biomedical research. Of the top 10 research institutions receiving National Institutes of Health grants in 2011, nine are in San Diego. The $835 million in grants awarded last year to San Diego scientists accounted for more than 85 percent of the grants allocated in the four-county region.

The report says the four-county life sciences cluster comprises more than 3,500 companies and employs over 97,000 people. On average, salaries range between $54,141 and $116,462, well above the national and regional averages. Including direct, indirect, and induced employment, the report says this region supports a total of 248,800 jobs that pay over $17.7 billion in wages and generate $57 billion in economic activity.

San Diego County alone accounts for 1,700 companies that employ 41,937 people. Including direct, indirect, and induced job, San Diego’s industry supports more than 106,000 jobs that pay $7.5 billion in wages and generate roughly $22 billion in overall economic activity. A .pdf file of the full report can be downloaded here.

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As early stage biotech startups advance their drug candidates into pre-clinical development, many must decide at some point whether to start working with a big pharmaceutical or biotech partner to continue to pursue their program through clinical trials.

It’s no small decision, and a topic of increasing industry interest, especially since initial public offerings (IPOs) by life sciences companies have fared poorly in recent years, curtailing their ability to raise cash and develop new drugs on their own. Of the 12 biotechs that went public in 2011, for example, 10 raised substantially less cash than they wanted to, according to the BIO industry group.

The IPO class of 2010 also was schooled in terms of post-IPO performance, with shares in just four of the 12 biotechs trading higher at the end of 2011 than when the companies began trading. Small wonder, then, if Wall Street traders are asking, “Why buy biotech shares at the IPO when we can get them cheaper later?”

So joining forces with larger drug companies offers a wise alternative strategy, which was evident in a new conference that Biocom organized last year to focus on the nitty-gritty of biotech-pharma partnerships. (The Second Annual Global Life Science Partnering Conference convenes in San Diego on Feb. 1, with an agenda that includes VIP speakers from GlaxoSmithKline, Merck, Vertex, Novartis, Pfizer, Roche, and Bristol-Myers Squibb.)

Under the circumstances, you’d think these times would be ideal for partnership deals. After all, big pharmas are prospecting for new drug candidates outside their own R&D programs, and late-stage venture financing remains tenuous for today’s startups. But to borrow a pop psychology concept, pharmas and biotechs are from different planets. Startups are almost invariably motivated by a need for capital to advance their drug development program. Hooking up with a particular pharma may or may not align with their true strategic desires. Big pharmas, on the other hand, are looking to fill their pipeline with new products, but they have trust issues. The pharmas ask themselves, “Does that biotech want a true drug development partner, or just some tawdry substitute for venture financing?”

Of course, this isn’t something that happens on Match.com. The process of choosing the right partner and negotiating a … Next Page »

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Money pumped into San Diego’s regional economy by venture capital firms hit an eight-year low in 2011, with a total of $829 million invested in 104 startups throughout the year, according to the MoneyTree VC survey being released today. The 2011 deal count was the lowest seen in San Diego since 1997.

The 2011 numbers represent a 5 percent decline in dollars and a 17 percent decline in deals in comparison with the previous year, when VCs put a total of $871.7 million in 126 startups, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association (NVCA) and Thomson Reuters.

The decline in San Diego’s venture activity ran counter to the nationwide trend in 2011, in which $28.5 billion was invested in 3,673 deals—and ranks as the third-highest total in the past decade. The U.S. numbers represent a 22 percent increase over the $23.6 billion in 2010 VC funding and a 4 percent rise over the previous year’s deal count, according to the MoneyTree analysis.

The overall U.S. trend depicted in the MoneyTree Report generally agrees with the rise in venture activity nationwide that CB Insights charted last week in its 2011 findings. CB Insights, the New York financial analysis firm, said the $30.6 billion VCs invested in 3,051 deals throughout 2011 was a 10-year high in terms of both dollars and deals. (The two sets of numbers don’t line up exactly because the firms use different methods to collect their venture data, and count dollars and deals in different ways.)

In the fourth quarter of 2011, the MoneyTree Report shows that venture capitalists invested $269 million in 23 deals in the San Diego area, with life sciences startups in diagnostics, drugs, and devices accounting for roughly two-thirds of the transactions. It represented a … Next Page »

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Development deals, clinical advances, startup funding, and new hires made up the New England life sciences news this week.

—Chelsea, MA-based Civitas Therapeutics, a spinout from the Waltham, MA, biotech Alkermes (NASDAQ: ALKS), said that its inhaled form of the Parkinson’s disease drug L-dopa performed well in a Phase 1 clinical trial. The study aimed to test the drug’s safety and whether the drug’s delivery to the lungs gets it into the bloodstream in levels that produce a therapeutic outcome.

—Serial biotech entrepreneurs Bob Langer (of MIT) and Omid Farokhzad (of Harvard Medical School) have founded their newest company, Blend Therapeutics, alongside MIT professor Stephen Lippard. Blend is reportedly backed by Flagship Ventures, New Enterprise Associates, and NanoDimension.

—Cambridge-based genomics analysis startup Knome named former NormOxys CEO Martin Tolar its new chief executive and landed a new contract from Johns Hopkins University.

—Watertown, MA-based Forma Therapeutics announced a cancer drug discovery partnership with Johnson & Johnson’s (NYSE: JNJ) Janssen Biotech, worth up to $700 million over time. That’s less than a week after Forma’s $65 million partnership with Boehringer Ingelheim was announced.

—Warp Drive Bio came out of the woodwork this week with $125 million in funding, and hopes to examine the genetic makeup of plants, animals, and other organisms to find hot new drugs. Cambridge-based Warp is backed by Boston firm Third Rock Ventures, Greylock Partners, and French pharmaceutical giant Sanofi, and has an elite roster of founders, including Harvard genomics expert George Church.

—Cambridge-based Flagship Ventures surpassed its initial $250 million expectation for its fourth fund, announcing the fund closed at $270 million. It will focus on investments in the life sciences and cleantech sectors.

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There was a whole lot of life sciences news over the past week. Here’s my roundup.

—Carlsbad-based Life Technologies (NASDAQ: LIFE) said it’s taking orders for a benchtop genome sequencer that can to decode an individual’s DNA within 24 hours and at a cost of roughly $1,000. The company priced its new Ion Proton Sequencer at $100,000 to $150,000, which also represents a dramatic reduction compared with the cost of existing DNA sequencers, and might even entice some practicing physicians to buy into the idea of personalized medicine. A cross-town rival, San Diego-based Illumina, also introduced an improved version of its gene-sequencing machine capable of same-day service, although Forbes’ Matthew Herper says Illumina’s HiSeq 2500 is priced at $740,000.

—A $1 million gift to the Tech Coast Angels from the family of slain TCA member and life sciences investor John G. Watson has enabled the angel group to establish a nonprofit foundation to support entrepreneurism in the San Diego region. A financial adviser, who awaits sentencing following his conviction two months ago, murdered Watson in his La Jolla town home. Watson’s sister, Gillian Ison, told the TCA, “John loved investing, innovation, and the entrepreneurial spirit that he discovered when he arrived in San Diego. We believe that a foundation supporting entrepreneurism is the best way to honor his memory and his life.”

—San Diego’s AnaptysBio said it has established strategic alliances with Novartis and an undisclosed pharmaceutical company. The company plans to use its proprietary technology to discover and develop new therapeutic antibodies with multiple cancer-related therapeutic targets. AnaptysBio said the two deals provide global rights to develop and commercialize a limited number of antibodies against each cancer target that AnaptysBio generates.

—In his BioBeat column, Luke previewed the five myths likely to make the rounds at this week’s JP Morgan Healthcare Conference in San Francisco. You could say that Luke inoculated readers from excessive optimism by writing, “Hope and hype are a couple essential ingredients in this business, and every year both are on display at this conference. Sometimes the wishful thinking can congeal into conventional wisdom.” Is that good, or what?

— Wylie Vale, a Salk Institute scientist, renowned expert on brain hormones, and founder of San Diego’s Neurocrine Biosciences (NASDAQ: NBIX), died on Jan. 3 while vacationing in … Next Page »

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Clinical trial results and drug collaborators made up the New England life sciences news this week.

—New Jersey-based drugmaker Merck announced backing a few Boston-area companies in the past few weeks. Its Global Health Innovation Fund led a $10 million financing for Cambridge, MA-based Daktari Diagnostics, a developer of technology for testing small quantities of blood and other fluids that it hopes can monitor HIV patients in the developing world. And Merck pledged $17 million to Marlborough, MA-based Physicians Interactive Holdings. The company will put the money towards developing its online and mobile tools to connect doctors and pharmaceutical companies.

—An experimental drug from Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) helped lower so-called bad cholesterol by an average of 39 percent at the highest dose studied in a small clinical trial.

—Aveo Pharmaceuticals (NASDAQ: AVEO) of Cambridge said it met it goals in a clinical trial called TIVO-1 of its experimental drug for treating kidney cancer. In the study of 517 patients, Aveo’s tivozanib was able to keep tumors from spreading a median of 11.9 months, compared with 9.1 months for another drug in its class from Bayer and Onyx Pharmaceuticals. It was a narrow victory, though, as the trial’s goal was to show the Aveo drug kept tumors from spreading about an extra three months.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) said it will pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) up to $299 million for collaborating on a treatment for a spinal muscular atrophy, a rare disorder found in newborns.

—Inspiration Biopharmaceuticals moved into its new digs in Kendall Square, after more than seven years of operating as a virtual biotech company that’s pursuing hemophilia treatments. It was founded by hedge fund manager John Taylor and Scott Martin, a Texas energy veteran whose son has hemophilia.

—The founders of Sermo, a Cambridge-based provider of an online community for doctors, are moving on to a new spinoff called par8o, the online publication Pharmalot reported. CEO Daniel Palestrant and chief medical officer Adam Sharp say on the par8o website that the new company will be focused on more efficiently connecting doctors and patients.

—Watertown, MA-based Forma Therapeutics inked a deal with Germany-based Boehringer Ingelheim that provides $65 million in upfront cash and four years of R&D support for discovering cancer drugs. Forma, which now has seven partnerships with heavy hitters, could also get potentially $750 million more from Boehringer Ingelheim as the cancer drugs move through development.

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San Diego’s Elevation Pharmaceuticals says today it’s raised $30 million in Series B funding, which is expected to carry the startup through its mid-stage trials for a new aerosol drug for treating chronic obstructive pulmonary disease (COPD). The fresh round was led by Denmark’s Novo Ventures life sciences fund, which keeps an office in San Francisco, and was joined by previous investors Canaan Partners, TPG Biotech, Care Capital, and Mesa Verde Venture Partners.

Just a few months ago, Elevation said it had received $17 million that represented the second tranche in a $30 million Series A round of funding that the company disclosed in early 2010.

Novo Ventures’ Heath Lukatch, a San Francisco-based partner who is joining Elevation’s board, tells me Novo led the current round after begging off the deal when the life sciences startup was raising its Series A funding in 2009. At that time, Elevation had run “a very small trial” of its drug candidate, a long-acting bronchodilator, “that was suggestive of efficacy,” Lukatch says.

Since then, Lukatch says the three-year-old startup has minimized the risks that loomed in his mind a couple of years ago. “They have run a larger trial—that was the biggest point in terms of ‘de-risking’ the deal,” he says. “They were able to hit their costs, and meet their development milestones.”

Lukatch says he also felt reassured by moves the company made recently to beef up its leadership. Elevation announced in September that it had filled two newly created positions with a couple of veteran pharmaceutical executives: Former Zelos Therapeutics President Jaisim Shah was named as a senior vice president and Chief Business Officer, and Pravin Soni, who previously oversaw development of a new inhalable drug delivery system, was named as senior vice president and chief technical officer.

Elevation says its lead drug candidate, designated EP-101, is being developed with an aerosol delivery device developed by PARI Pharma to atomize a liquid drug into a fine mist.

Novo’s Lukatch says Elevation has completed enrollment of a multi-center mid-stage clinical trial to evaluate EP-101 in patients with moderate-to-severe chronic obstructive pulmonary disease (COPD), an umbrella term for emphysema and chronic bronchitis. Smoking often causes COPD.

Lukatch says the $30 million Series B round, which also will be divided into tranches, is sufficient to complete that study as well as a second mid-stage trial planned for later this year to determine the optimal dosage and dosing regimen for late-stage studies.

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‘Tis the season for end-of-year acquisitions to be announced, now that everyone’s back at work. Hopkinton, MA-based VelQuest, a maker of pharmaceutical and medical device-related software, has been acquired by San Diego-based Accelrys (NASDAQ: ACCL), the scientific R&D software firm, for $35 million in cash.

VelQuest started in 1999 and is led by CEO and co-founder Ken Rapp. Its investors include GE and MedEquity Capital. The company makes software that helps life sciences organizations manage lab test procedures efficiently and in compliance with FDA regulations. “All key members” of the VelQuest management team are staying on post-acquisition, according to the press release.

Accelrys makes a wide range of modeling, simulation, lab management, workflow, and data management software. The VelQuest acquisition adds another piece to the corporate strategy that Accelrys CEO Max Carnecchia outlined last year. He said the company aspires to help its customers manage the entire process of scientific development by offering a range of software products that can harness the innovation, experiments, modeling and simulation, and other work being done in labs on a global basis, both within their own organizations and within their collaborators.

The company says it has more than 1,300 customers across pharma, biotech, energy, chemicals, aerospace, and other industries.

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Big drug collaborations and acquisitions took the spotlight in the New England life sciences news pool this week.

—Coronado Biosciences, which moved from New York to Burlington, MA, this past August, debuted on the Nasdaq stock exchange, with an opening share price of $6.50 on Monday. The company (NASDAQ: CNDO) went public not through a conventional IPO, but by registering all of its privately held shares as common stock.

—Cambridge, MA-based Metamark Genetics and Johnson & Johnson unit (NYSE: JNJ) Janssen Biotech inked a research agreement to validate gene targets that play in a role in the spreading and progression of tumors. Metamark will receive an undisclosed upfront payment and is eligible for up to $365 million in milestone payments.

—Thousand Oaks, CA-based Amgen, which has R&D operations in Cambridge, signed a collaboration agreement with New Jersey-based Watson Pharmaceuticals (NYSE: WPI) to develop and sell antibody drugs that are knockoffs of the originals, known as biosimilars. Amgen (NASDAQ: AMGN) will contribute its research and expertise to making the protein drugs that are produced in living cells, and Watson will put as much as $400 million into the development.

—Excelimmune, a Woburn, MA-based developer of so-called polyclonal antibodies, took in $12 million in financing from a private investor that it did not publicly name. The money will go toward developing Excelimmune’s molecules that aim to combat infectious diseases like Staphylococcus aureus (MRSA).

—Cambridge-based Millennium: The Takeda Oncology Company got access to a new portfolio of small molecule cancer drugs that are designed to block variations of the target in cancer biology known as the PI3 kinase pathway. That came through the acquisition of San Diego-based Intellikine by Millennium’s Japan-based parent company, Takeda Pharmaceuticals.

—My colleague Arlene wrote about Enumeral Biomedical, a New York startup founded on science from MIT chemical engineering professor J. Christopher Love. He developed technology called protein microengraving that measures how the human body responds to infection and disease.

—PatientKeeper, a Waltham, MA-based developer of physician workflow software, pulled in another $6 million in growth funding, from Flybridge Capital Partners, New Enterprise Associates, and Whitney & Company.

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—Merry Christmas, Troy Wilson! Japan’s Takeda Pharmaceutical agreed to pay $190 million upfront, plus another $120 million in future milestone payments, to acquire Intellikine, the San Diego biotech that CEO Wilson co-founded in 2007. Takeda wants to combine Intellikine’s portfolio of small molecule drugs in the PI3 kinase pathway, a hot target in cancer biology, with its Cambridge, MA-based Millennium: The Takeda Oncology Company.

—San Diego’s Zogenix (NASDAQ: ZGNX) said it completed a series of meetings with FDA regulators about its new drug candidate, an extended-release and acetaminophen-free formulation of the painkiller hydrocodone (Zohydro). Zogenix said it hopes to submit a new drug application for its opioid early in the second quarter of 2012.

—San Diego specialty drugmaker Somaxon Pharmaceuticals (NASDAQ: SOMX) said it hired an investment banking firm to evaluate the possible sale of the company and other strategies “to maximize shareholder value.” After launching doxepin (Silenor) last year as a treatment for difficult insomnia cases, Somaxon has encountered unexpected competition from generic drugmakers. The alternatives under consideration include selling Somaxon or its doxepin-related assets, forming a partnership, or pursuing other collaborations related to the prescription or over-the-counter rights to the drug.

—San Diego’s Trius Therapeutics (NASDAQ: TSRX) said its lead antibiotic drug candidate, tedizolid phosphate, met the main goal of its pivotal clinical trial. A study of 667 patients showed that the Trius antibiotic was roughly equal to Pfizer’s linezolid (Zyvox) when treating acute skin and skin structure infections.

— In his Intellectual Capital column, Steve Chapple profiled Steve Jurvetson, managing partner of the Menlo Park, CA, venture firm Draper Fisher Jurvetson. The 44-year-old Jurvetson led the firm’s investments in San Diego’s Synthetic Genomics and its agricultural spinoff, Agradis, as well as Genomatica, which has been developing ways to use bacteria and sugar to make chemicals. Jurvetson told Chapple, “San Diego’s ground zero for the renaissance that I call Biotech 2.0.”

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The acronym RSV is one that often inspires dread in the hearts of parents—it stands for Respiratory Syncytial Virus, and it hospitalizes 75,000 to 125,000 children under the age of one each year, infecting almost all children by the age of two. RSV can also have a life-threatening impact on the elderly.

There is a successful treatment against RSV made by AstraZeneca’s MedImmune unit, but there is no marketed vaccine to protect against RSV infections in the first place. That may soon change as Ann Arbor, MI-based NanoBio announced yesterday that it will partner with pharmaceutical giant Merck in a preclinical collaboration in the development of an RSV vaccine that’s delivered as a nasal spray. About a year ago, the vaccine program secured a $6 million grant from the Bill & Melinda Gates Foundation.

“This is a very exciting project for the company,” says James R. Baker, Jr., NanoBio‘s Founder and CEO. “We feel this could be a really useful therapy toward prevention.”

NanoBio’s technology appears effective at preventing infection, Baker says, while also remaining free of the disease-eliciting side effects that have derailed other attempts at an RSV vaccination.

The studies will evaluate the combination of Merck’s proprietary RSV antigen with NanoBio’s NanoStat adjuvant, which makes the vaccine more potent. As part of the agreement, Merck has the option to negotiate a non-exclusive license to NanoBio’s technology for use in the development of a commercial RSV vaccine.

Founded in 2000 as a spin-out from the University of Michigan’s Center for Biologic Nanotechnology, NanoBio is a biopharmaceutical company focused on developing and commercializing novel products for the prevention and treatment of infectious diseases based on its patented NanoStat platform. Baker estimates that the collaboration with Merck will last 18 months to three years.

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[Updated 12/12/11 11:20 am to clarify terms for startups. See below.] After spending much of her career in the tech sector, Melinda Richter has been pondering a provocative question for the life sciences industry.

“Billionaires are a dime a dozen in tech,” she says, “but it’s hard to find an entrepreneur in the life sciences who is a billionaire. I can’t think of a single small biotech company CEO who became a billionaire.”

Richter says she founded San Francisco-based Prescience International at least partly with the hope of addressing such inequities. Prescience helps start and manage life sciences incubators, institutes, and other research centers.

Melinda Richter

Mostly, though, Richter says she wants to make it possible for life sciences entrepreneurs to take advantage of the sort of low operating costs that make it so easy for a handful of tech entrepreneurs to start a Web 2.0 company with a few hundred thousand bucks. It’s that kind of minimal capital requirement that can enable biotech entrepreneurs to prove their concept, giving them something more than a business plan when they seek venture funding. The low-cost model might even help entrepreneurs hold onto a bigger ownership stake in their startups.

“You look at these IT companies,” she says. “You give a couple of guys a couple hundred thousand, and after a couple of months they’ve got a new iPhone app and they’re ready for business. But it’s not curing cancer or HIV.”

So Richter was on the ground floor, so to speak, as executive director when the San Jose Redevelopment Agency spent $6.5 million to start the San Jose BioCenter, a life sciences incubator that opened in 2004. The BioCenter officially hired Prescience to manage the facility in 2005, and Prescience took over management of a cleantech incubator, the San Jose Environmental Business Cluster, in 2009.

Now Prescience is in San Diego. Johnson & Johnson has hired Richter’s firm to manage the incubator it has been creating at its San Diego R&D facility, now known as the Janssen Labs at San Diego. Under a plan unveiled in October, J&J plans to host 18 to 20 startups at its new innovation center, which has various size wet labs and offices for individual companies, and common areas for shared use. Janssen Labs has emphasized that space in its innovation center comes with no strings attached. The startups that enroll will not be required to give up an equity stake or intellectual property rights. They simply have to pay a monthly fee under a 90-day lease agreement.

When we met recently, Richter told me she got into the business partly for personal reasons.

After graduating from the University of Saskatchewan (she is a Canadian), Richter joined Nortel Networks, where she says she spent more than eight years on a fast-track executive program that took her to corporate posts in the United States, Europe (she got her MBA in France), Latin America, and China.

While in China, however, Richter had what you might call a life-altering experience. She says she got very sick and was … Next Page »

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Medical device makers, drug developers, charity foundations, and health IT startups rounded out the New England life sciences news pot this week.

—Cambridge, MA-based MedicalRecords.com is raising $500,000 to put toward the development of its website, which connects sellers of electronic medical records software with doctors looking to adopt the technology.

—Rib-X Pharmaceuticals, a New Haven, CT-based antibiotics developer with two drugs in clinical trials, filed documents with the SEC indicating its intent to go public. The company, founded in 2000, has developed a drug-discovery platform based around an atomic, three-dimensional picture of the interactions between the antibiotics and the bacteria they target.

—The Michael J. Fox Foundation for Parkinson’s Research awarded grant money to Chelsea, MA-based Civitas Therapeutics, a startup working to improve the standard treatment for Parkinson’s disease. Patients usually take the drug, levodopa (L-dopa), in pill form, but Civitas is developing a version that they could inhale to get quicker, more precise doses of the medication. The company, spun out by the Waltham, MA, biotech Alkermes (NASDAQ: ALKS) will test the inhalable drug in a pair of clinical trials over the next year.

—Mundipharma will provide $50 million to Cambridge-based Infinity Pharmaceuticals in 2013 to support the development of Infinity (NASDAQ: INFI) drug candidates, like IPI-145, a molecule that’s being designed to treat blood cancers and inflammatory conditions. Infinity and Mundipharma first inked a collaboration deal in 2008, in which Mundipharma and its Stamford, CT-based affiliate Purdue Pharma, the maker of the drug oxycodone (Oxycontin), said they would pay $75 million to Infinity to access the company’s research and development capabilities.

—Cambridge-based Idera Pharmaceuticals regained the rights to a cancer drug it was previously co-developing with Merck KGaA, until the German drugmaker cancelled the collaboration this past July. Merck will continue an ongoing clinical trial of the drug, IMO-2055, in combination with Eli Lilly’s cetuximab (Erbitux) in 104 patients with a form of head and neck cancer, and Idera will reimburse the company for about 1.8 million Euros in expenses associated with the trial across 12 months. Idera (NASDAQ: IDRA) will own the data from that trial and other clinical studies Merck helped conduct and finance.

—A bioreactor made by Holliston, MA-based Harvard Bioscience was recently used in the world’s first two synthetic trachea implantations. Harvard’s InBreath Bioreactor helped create the tracheas by using the patients’ own stem cells. The company (NASDAQ: HBIO) has been around for 110 years as a maker of scientific instruments such as pumps and glassware for drug research, but it’s expanding its presence in the regenerative medicine field.

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In the news since the Thanksgiving holiday, we’ve had a fascinating bit of biomedical research from Internet guru Larry Smarr, a criminal conviction, and an extended Q&A with Eli Lilly CEO John Lechleiter. Your life sciences briefing begins now.

—Under fierce competition in the market for gene expression microarray tests, Santa Clara-based Affymetrix (NASDAQ: AFFX) agreed to pay $330 million to acquire San Diego-based eBioscience, a maker of flow cytometer instruments and chemical reagents used in biomedical diagnostics. Affymetrix said it plans to keep eBioscience’s management team and operations in San Diego.

—Pfizer (NYSE: PFE), the New York pharmaceutical giant, agreed to buy Excaliard Pharmaceuticals, a Carlsbad, CA-spinoff from Isis Pharmaceuticals (NASDAQ: ISIS). Isis said it’s getting $4.4 million upfront, and as much as $14 million over time for its stake in Excaliard, plus additional milestone and royalty payments. Excaliard was founded in 2006 to use Isis’ gene-silencing technology, known as antisense, to curb the activity of certain genes implicated in excessive skin scarring.

—A 23-page article offers an insightful glimpse into the converging future of personalized medicine, health IT, and wireless health. It is titled, “Quantified Health: Toward Digitally Enabled Genomic Medicine: A 10-Year Detective Story of Quantifying My Body.” I’m curious what other experts in these fields think about this bit of scientific research from Larry Smarr, founding director of the UC system’s California Institute for Telecommunications and Information Technology (CalIT2). I posted my question-and-answer session with Larry here.

—A San Diego jury convicted Kent Thomas Keigwin, a 61-year-old financial advisor, in the first-degree murder of John G. Watson, a retired life sciences CEO and local angel investor. Prosecutors argued that Keigwin killed Watson to steal millions of dollars from Watson’s accounts, by using Watson’s personal information to impersonate him. Keigwin is scheduled to be sentenced on Jan. 20.

—Amid the celebration of their success with Amira Biosciences (purchased earlier this year for $475 million by Bristol-Myers Squibb), Versant Ventures’ Brad Bolzon and Amira co-founder and CTO Peppi Prasit started a new company, Inception Sciences. Prasit and Bolzon plan to operate Inception Sciences as a holding company for spinning out individual drug development programs as separate corporate entities. I hope to get more details about the venture next week.

—In a ruling issued before Thanksgiving, a federal judge in San Diego declared that San Diego-based Histogen and its Histogen Aesthetics subsidiary are not infringing on a couple of key patents held by Carlsbad, CA-based SkinMedica. In a lawsuit filed in early 2009, SkinMedica alleged that Histogen was infringing on its proprietary “NouriCel” technology for culturing certain types of skin cells in growth media. Both companies use growth factors and other proteins derived from the cells to make skin care products.

—Luke devoted a two-part BioBeat column to his conversation with Eli Lilly CEO John Lechleiter about the pharma business generally, and Lilly (NYSE: LLY) in particular. In part 1, Luke talked mostly with Lechleiter about ways to get pharma out of its current rut. In part 2, Luke featured the Lilly CEO’s responses to questions that readers relayed to him via Twitter.

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Last year’s blockbuster film “Inception,” was about a dream within a dream within a dream, which made it a little hard to follow.

Likewise with “Inception,” the San Diego life sciences startup that was founded earlier this year by Versant Ventures’ Brad Bolzon and Peppi Prasit, the former co-founder and chief scientific officer at San Diego’s Amira Biosciences. With Inception, the founders apparently have set out to duplicate their success at Amira, which was acquired in July by Bristol-Myers Squibb in a deal valued at $475 million.

But it can get a little hard to follow.

As we reported this summer, “Inception 1″ disclosed in a regulatory filing that it had raised $5 million in an initial round of funding that targeted $10 million. At that time, Prasit (who is also a San Diego Xconomist) responded to my request for more details with a short e-mail: “It’s an incubator for ideas right now. I would like to keep it stealth for a little while.”

Now, according to another regulatory filing completed before Thanksgiving, “Inception 2,” a different entity created by Bolzon and Prasit, says it also has raised $5 million of a planned $10 million round.

Versant’s Bolzon told VentureWire reporter Brian Gormley a few months ago that the startup officially known as Inception Sciences is intended to serve as a holding company for spinning out individual drug development programs as separate corporate entities. The idea represents a new life sciences business model that makes it easier for Big Pharma companies to acquire a set of potential drug compounds without the “non-strategic assets” that come with a biotech acquisition.

Hmmmm. Since these would not be conventional M&A deals, would this business model also dispense with the need to involve investment bankers in an acquisition?

Another advantage to Inception Sciences’ model is that it allows investors to provide funding “a la carte” into specific drug development programs, according to Alex Lash of The In Vivo Blog. Lash also says it provides a way to provide investors a return on their capital without selling the underlying science, which would remain with the holding company.

VentureWire says Versant provided seed funding for Inception 1 to discover drugs for treating neurodegenerative diseases. Inception 2 is focusing on metabolically targeted drugs designed to cut off a tumor’s fuel supply.

The holding company, which has 25 employees, anticipates forming Inception 3 in mid-2012 or early 2013.

I sent Prasit another query about Inception this morning, with no response yet. But I’m still hoping.

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The Michigan State University Bioeconomy Institute in Holland, MI announced earlier this month that, in an effort to establish a cluster of biotech businesses, it is the recipient of more than $1 million in grants: $580,000 from the U.S. Commerce Department’s Economic Development Administration and $500,000 from the Michigan Economic Development Corporation. The grants will go toward operating the institute’s Proof of Concept Center, a pilot plant that allows small startups developing novel, green chemical technologies to scale their products up to an industrial level.

“Scale-ups can pose a variety of technical, financial, and regulatory challenges,” says Paul Hunt, senior associate vice president for Research & Graduate Studies at MSU. ”With the Proof of Concept Center, the infrastructure is now available to small companies who would not normally have access to a pilot plant. Ultimately, the goal is to advance Michigan’s economy by encouraging the production of bio-based chemicals for use in the auto, furniture, and fuel industries.”

The MSU Bioeconomy Institute will provide firms with access to more than 7,000 gallons of stainless steel, glass-lined, and Hastelloy chemical reactors, as well as centrifuges, dryers, filters, and related ancillary equipment. In addition to providing access to capital equipment for scale-up production, MSU will also provide research and chemical manufacturing expertise and regulatory compliance assistance.

West Michigan’s regional economic development organization, Lakeshore Advantage, will also manage a laboratory-based incubator for green entrepreneurial ventures, offering advice on business planning, market development, and business proposals. The Prima Civitas Foundation will coordinate statewide recruitment of client firms for the Proof of Concept Center, as well as facilitate firms’ contacts with venture funds and angel networks, beginning with North Coast Technology Investors. In addition, the … Next Page »

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Swarmology, a San Diego provider of social media analytics for healthcare clients, is stepping into the light today, disclosing initial funding of $1.2 million and the debut of its website.

The company, founded last December by pharmaceutical and health IT executive Malcolm Bohm, provides targeted, Web-based marketing services for its customers by analyzing online conversations about specific health concerns on Facebook, Twitter, and other social media. Swarmology’s customers already include a large healthcare insurance provider and a couple of smaller pharmaceutical companies, Bohm says.

Before arriving in San Diego last year, Bohm says he was working with electronic health insurance reimbursement records at New Jersey-based SDI Health to help drug developers minimize the costs and risks of their clinical trials. By working with “very rich data,” Bohm says he helped pharmaceuticals optimize the design of their clinical trials—in part by identifying the ideal medical center, and by mapping and recruiting patients for a particular study.

Bohm says the idea for Swarmology occurred after he began wondering if there was a comparable richness in the health and medical information that people share on Facebook and Twitter. “Enormous numbers of people are talking about their own health,” Bohm says. For example, he says Facebook users will update their status with such comments as “My daughter had another asthma attack today” or “I’m taking Sumatriptan [for a migraine] and it’s not working.”

Bohm says a Pew internet Life Research study published earlier this year shows that 70 percent of U.S. adults search online for health-related subjects, and some 43 percent are crowdsourcing their health care through online discussions with fellow patients and healthcare providers. Using data analytics, Bohm says, “You can get this wealth of information across wide swaths of social media. We can capture all the conversations—we call that a swarm—in a virtual community.”

While Swarmology’s technology is proprietary, Bohm says the Centers for Disease Control and the Pentagon’s Defense Advanced Projects Agency are using similar techniques to analyze social media “to try to understand if the online signals are sufficient to predict political unrest in other countries or to track and predict where flu and allergy outbreaks are going to stress regional healthcare systems. In the same way, Google can track and predict contagious outbreaks as people go online to search for information about their symptoms.

Bohm says Swarmology can collect online comments posted on a particular topic—diabetes, for example—by searching for specific terms such as “insulin,” “blood,” “sugar,” and “HbA1c” (a standard lab test that measures blood sugar) as well as less-specific terms such as “diet” and “exercise” that are more contextual. By using semantic analysis and natural language processing, Bohm says Swarmology’s technology is sophisticated enough to identify and include comments like “I’m walking like a zombie today” in a search for online comments about insomnia.

Bohm says Swarmology also has been working on a set of algorithms to … Next Page »

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The price of shares at San Diego’s Gen-Probe, Amylin Pharmaceuticals, and Optimer were clipped for various reasons over the past week, but several local startups successfully raised capital. Our good news, bad news briefing begins here.

—Rempex Pharmaceuticals, a San Diego biopharmaceutical startup developing a new approach to antibiotics resistance, said it raised $67.5 million in Series B venture funding—bringing total funding for the company to $76 million since its founding less than five months ago. The startup is on a fast track, and plans to use the capital to accelerate the commercialization of its therapies for treating gram-negative bacterial infections. Rempex said it plans to file a new drug application for its first drug candidate in the second half of 2012. New investors Frazier Healthcare Ventures and Vivo Ventures joined existing investors SV Life Sciences, OrbiMed Advisors, and Adams Street Partners in the latest round.

—Cambridge, MA-based Vertex (NASDAQ: VRTX) has held the high ground in hepatitis C therapies since the FDA approved its protease inhibitor drug telaprevir (Incivek) last year. But two rivals are gaining ground. The price of Vertex shares have fallen with the rise of Alpharetta, GA-based Inhibitex (NASDAQ: INHX) and Princeton, NJ-based Pharmasset (NASDAQ: VRUS). Vertex, which has operations in San Diego, hit a 52-week high of $58.87 on May 12, but it has been trading around $31 in recent days.

—Adding to the competition in hepatitis C drugs, San Diego-based iTherX Pharmaceuticals raised almost $3.2 million to advance its development of a prophylactic treatment for Hepatitis C, according to a regulatory filing earlier this week. The startup said in March that its drug candidate TX-5061 appears to prevent the hepatitis C virus from entering liver cells, and has shown “potent preclinical antiviral activity against all HCV genotypes.” Former UCSD virologist Flossie Wong-Staal is a co-founder and chief scientific officer. The company raised $2.8M in 2010.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) agreed to pay Eli Lilly more than $1.5 billion as it gradually reassumes responsibility for global commercialization of its best-selling diabetes drug in a deal that ends its 10-year partnership with Lilly. Under their agreement, which also ends litigation with Lilly, Amylin will take over sales of exenatide (Byetta) in the U.S. by the end of this month—and global sales of both Byetta and an experimental, extended release version (Bydureon) over the next two years. Amylin shares, which hit a 52-week high of $16.65 on Jan. 27, have been trading around $10 a share over the past few weeks.

—Xconomy east coast biotechnology editor Arlene Weintraub profiled PharmaSecure, a four-year-old startup in Lebanon, NH, with operations in San Diego, Michigan, and India. The company provides machines to drug-makers that print unique bar codes and serial numbers on drug packaging. PharmaSecure raised $3.9 million last month from Innovation Endeavors, Gray Ghost Ventures, Healthtech Capital, and angel investors. The Tech Coast Angels (TCA) participated in … Next Page »

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