[Corrected on 10/19/11 at 4:45 pm. See below.] Miguel Yeoman—known as the artist BeloZro and, now, as cofounder of the startup company BeloZro Visual Energy—was born and raised on Detroit’s hardscrabble east side. As he tried to stay out of trouble in 1980s Detroit—an extraordinarily violent period in the city’s history—he found his way to boxing, and then to art.

He spent a decade working on the line in local factories until he finally mustered the courage to try to make a living off his craft. He moved to Los Angeles and found limited success—a fairly big gallery show, but also an attorney who swindled him out of a quarter-million dollars. So, in 2008, back to Detroit he came.

“I came back with my tail between by legs,” he says. “I left Michigan for a reason, but I got my ass beat by the business.”

Shortly after returning to Michigan, he hired a business manager who also happened to work at Chrysler. It was the manager’s idea that Yeoman should do a painting to counteract the mounting bad press that the Big Three were getting as they sped toward bankruptcy. Yeoman came up with a conceptual sketch that showed all three Motor City automakers as a unified front.

“It was sort of a Detroit against the world type of thing,” Yeoman says.

He spent three days turning the sketch into a painting and then showed it to his business manager, who began pitching it to executives at Chrysler. The idea was that Yeoman would donate the piece to Chrysler in exchange for wall space, publicity—anything to get the struggling artist’s name in people’s mouths. Instead, the painting made it all the way up the Chrysler chain of command to vice-president of manufacturing and engineering Byron Green, who loved it.

“My manager called me and asked me if I was sitting down,” Yeoman says. “I was expecting more bad news but instead, he told me Chrysler was prepared to offer us $1.8 million for the painting.”

Chrysler proposed to buy the piece, but wanted Yeoman and UAW president Ron Gettlefinger to present the painting to President Obama as a thank you for his support of the bailout plan and … Next Page »

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The FDA has spent decades talking about how its job is to make sure all kinds of U.S. medical products are safe to use, and effective. Now it’s coming out with a new strategic outline on how it intends to do all that same stuff, while also spurring the development of more innovative drugs and devices that will help the U.S. hold onto its competitive advantage in the life sciences.

The FDA commissioner, Margaret Hamburg, today is releasing the 40-page overview with a decidedly non-adversarial title of “Driving Biomedical Innovation: Initiatives for Improving Products for Patients.”

While the full report has some defensive notes in it about how the FDA has already been trying to stir innovation for years through its 2004 Critical Path Initiative and other vehicles, it acknowledged a number of complaints that entrepreneurs, big companies, and investors have leveled against the agency for years. It cites the common beefs about how the agency can be unpredictable; not so good at helping small businesses navigate its processes; not exactly on the technological cutting edge; and inefficient. The FDA now says, after hearing input from various outside groups for months, that it wants to reform by improving its outreach to small businesses; creating a fast approval pathway for certain targeted therapies; improved data sharing; scientific training; and streamlining of processes and regulations.

It cites the familiar refrain to all industry observers about how the government and industry is pouring $95 billion a year into biomedical R&D, and getting fewer returns in the form of novel new products to help patients.

There’s a political backdrop to all of this, of course, as the President and the Congress are deeply worried about the stubbornly high jobless rate. Pharmaceuticals, biotech, and medical devices are three industries in which the U.S. is the undisputed world leader—yet there’s almost universal scorn for an FDA that has become so cautious and bureaucratic that it is stifling those industries and sending much of the U.S. competitive advantage overseas. Some prominent venture capitalists, and industry trade groups, have been pressuring people in the White House and in Congress for months to shake up the FDA, which I wrote about here back in April.

FDA commissioner Margaret Hamburg

The FDA talks like it has been listening. Hamburg wrote in the report that the agency “is working to position itself not only as a positive driving force in the ecosystem as a regulator, but also to facilitate medical product innovation.”

And Kathleen Sebelius, the U.S. Secretary of Health and Services of which the FDA is a part, added in a statement that: “The Obama Administration is committed to encouraging the entrepreneurs and businesses that are modernizing and strengthening our health care system. The innovation blueprint is another part of our effort to help businesses grow and keep Americans healthy.”

The blueprint is fairly vague in parts, and Hamburg notes in her introduction that it is an ongoing initiative and that it will be expanded.

One venture capitalist, Bob Nelsen of Arch Venture Partners, said he’ll need more assurance the FDA reforms are meaningful.

“It is a positive step that the FDA in recognizing that innovation matters. The verdict is out as to whether they will really change, so I will look for data. The FDA is under bipartisan pressure to re-think their policies that are leading the US to lose its huge advantage in medical devices to Europe, and [prompt] biotech investors like me to start investing in China,” Nelsen said in an e-mail.

“We no longer can justify investing in huge public health priorities like diabetes and Alzheimers, that cry for innovation investment, as a direct result of FDA policies that are muddled, unclear and don’t take patients into account. There is a dialog, and that is certainly a good thing, but as recently as two weeks ago Margaret Hamburg blamed the slow pace of drug approval on the lack of good science, not the FDA, which was a fall out of your chair moment, so we have a long way to go,” Nelsen said.

Still, the FDA document states repeatedly that the agency wants to be more supportive, and cites some of President Obama’s more business-friendly initiatives, such as the “Startup America” program which seeks to encourage high tech entrepreneurship as well as the “Strategy for American Innovation.”

Here’s the quick rundown on some of the programs the FDA has sketched out in its report, which it says should help spur more biomedical innovation:

—The FDA plans to establish a … Next Page »

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If you dared to flip the channel to CNBC any time during the past week, it would have been hard to stay calm. The market was whipsawing all over the place, up one minute, down the next. Fear of government defaults and the potential for another recession were topics of endless debate. Fund managers were said to be antsy to unload any security riskier than a T-bill or gold—which means biotech was fast becoming especially unfashionable.

All the fearful talk may have been good for TV ratings and Internet page views. The wave of selling is definitely worrisome for any company that dares to do something risky like create innovative new life science products, such as cancer drugs. But all this talk is hardly a sign of any long-term catastrophe.

The last time I can remember this much fear coursing through the markets was September 2008, when the Lehman Brothers bankruptcy triggered government bailouts to stave off a global run on the bank. Most comments I heard and read last week said what’s happening today isn’t as frightening as that scenario. There are undoubtedly major problems today, like the rising cost of healthcare and the long-term threat that poses to governments around the world. Healthcare investors with any vision at all have to be worried about what might be done to clamp down on costs (and future profit margins) of pharmaceutical, medical device, and diagnostics companies.

Setting aside all those concerns for a moment, I thought it would be instructive to check on how biotech investors reacted during that scary time of September 2008, compared with what we’ve seen the last two weeks. So I looked at the two-week period starting with the close on Sept. 12, 2008 (the last day of trading before the Lehman bankruptcy), and the two-week period starting with the close on Aug. 1, 2011 (the last full day before President Obama signed the bill to raise the debt ceiling, averting what could have been a U.S. government default).

Here’s what I found:

Indexes                                       Sept 12-26, 2008                           August 1-12, 2011

Nasdaq Biotech Index (NBI)               -0.2%                                               -8.6%

Amex Biotech Index (BTK)                 -0.6%                                              -15.1%

Nasdaq Composite Index                   -3.5%                                                -8.6%

Surprisingly, even though most analysts agree the global financial system isn’t in as much trouble now as it was in 2008, biotech indexes, and the broader Nasdaq Composite Index, are getting hit even harder now.

Sure, lots of things have changed … Next Page »

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[Updated 6/15/11, 5:55 pm]. See below Earlier this year, it seems that Washington, DC (and much of the rest of the country) started to identify something that we here at Xconomy have known since our inception: that entrepreneurship will be a major force in driving technology breakthroughs and economic growth.

So what better time to shape our flagship event (XSITE-The Xconomy Summit on Innovation, Technology, & Entrepreneurship) even more around entrepreneurship than it usually is? The theme of this year’s event is The Entrepreneurship Era. We’ve populated the day with keynote addresses, plenary sessions, CEO chats, breakouts, panels, demos—even a rant-and-rave session. They examine various aspects of entrepreneurship, from Founders Stories to Managing Growth to Entrepreneurship Driven By Technological and Social Innovation, and all are tied together with the common thread of entrepreneurs daring to think big—in areas like venture investing, drug development, energy, and ecommerce.

As always, a large portions of our audience will be made up of entrepreneurs and investors. This year’s event will also have the highest number of startups (speaker and attendees) XSITE has seen yet. With two days still to go before the event, we’ve tracked 98 startup companies who have signed up to be at XSITE this Thursday. [Updated: Earlier we reported 74 startups as registered, but we received another rush of registrations and tracked some that we missed in the first list.] Check out the full list of startups below (those participating in the program are marked by an asterisk). If we missed your company, let us know. And if you want to be part of the crew, be sure to register, and we will add you to the list. There’s even a special startup rate.

1. 1366 Technologies*
2. 1Minute40Seconds
3. Adaptive Machine LLC
4. AdUpon
5. AHT Enterprises
6. Altaeros Energies*
7. AM Strategy
8. Artvenue
9. BayTech Services
10. BEAN
11. Beta Ltd.
12. Boston Device Development
13. Carefuze
14. CloudSwitch*
15. Collaborative Reasoning
16. CoolChip Technologies*
17. CraveLabs
18. Daily Grommet*
19. Dailyfeats.com*
20. Digital Lumens*
21. Doxsite
22. Embed.ly*
23. Embera NeuroTherapeutics
24. Enhanced Outcomes
25. Eragy
26. Family Health Portfolio
27. Fenugreen
28. Fergen
29. Fitness Keeper*
30. FloDesign Wind Turbine
31. Gilt Groupe*
32. Ginger.io*
33. Goodplates
34. GoodTwo
35. Greenbean Recycle*
36. Halley Tucker’s Book Box
37. Hamburger Corporate Management
38. HanGenix, Inc
39. Harvest Power*
40. imedcenter
41. Immuneering
42. InCrowd
43. Innovation World
44. Ipfolios.com
45. Jaoovation
46. Joule Unlimited*
47. Kyruus
48. Licensecompanion
49. Loom Decor
50. M.E.Me
51. Made in the Commonwealth
52. Marginize*
53. MC10
54. MessageAMP LLC
55. Mobilife
56. NetBlazr
57. New Leaf Legal
58. Oasys Water*
59. OmniStrat
60. OP Energy/Downeast LNG
61. OpSaniTx
62. OsComp Systems*
63. Pathogenica
64. Performable*
65. Picsha
66. PlasmaLogic LLC
67. Play140
68. PoKos*
69. Privy
70. Progeny Solar
71. Proper Cloth*
72. Qliance Medical Management*
73. Radaris
74. REBIScan*
75. Redstar*
76. RSV 1
77. SCME
78. Senexx
79. Skill – Guru
80. Smarterer*
81. SocialSci
82. Solar Machines
83. Sportlyzer
84. Springleaf Therapeutics
85. Startup Community Innovation Centers
86. STELLAService*
87. Strohl Medical*
88. Swifton CFOs
89. Take the Interview
90. TeenLife
91. Textaurant
92. The Portfolio Partnership
93. Truventis
94. Verona Systems
95. WaySavvy*
96. Whiteglove*
97. Xpertise LLC
98. Zarzatech

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When people think of Bill Gates, they probably think one of two things. He’s either a hard-driving software mogul, or warm-hearted billionaire devoted to saving the poor. But what fewer people realize is that Seattle’s most famous son also spends a lot of his time thinking about, and investing in, clean energy technologies that he hopes will have a shot at staving off a global warming catastrophe.

Gates shared some of his thinking on the subject this morning at a breakfast keynote for the nonprofit Climate Solutions, which drew more than 1,000 people downtown to the Westin Seattle. Gates, wearing a maroon baseball cap, was interviewed onstage by Jabe Blumenthal, an early Microsoft employee who now serves on Climate Solutions’ board. Gates spoke for about 30 minutes in front of this high-powered crowd of local business, political, and nonprofit leaders, about the challenge as he sees it with global warming, and what can be done about it. You can see the video here at grist.org.

Gates used this opportunity to make a few key points. He’s optimistic about the science of lots of different fields of the energy business—wind, solar, biofuels, nuclear, and energy efficiency. He’s optimistic about the business opportunities, and pointed out that he spent yesterday reviewing a number of promising ideas with the prominent venture capitalist Vinod Khosla. Gates, however, is less optimistic that governments, here in the U.S. and abroad, are willing to step up, to set mandates on carbon emission reductions, and to finance some of the basic research needed to spark renewable energy technologies.

“My key interest is that we get a solution that provides cheap energy that emits no CO2,” Gates said. “There are many paths it could go down. Anybody who thinks it will be easy is overlooking the difficulties.” It will be extremely hard to get a large percentage of the world’s energy from any one source like wind, nuclear, solar, or biofuels, Gates said. “We need to go full speed ahead on every one of them.”

There’s a lot of food for thought to consider from Gates’s high-density stream of consciousness on the climate change issue. This was the first time I’d seen him speak in person, and as I write this, I’m still processing what I really want to learn from his remarks. (I’m definitely going to let some of this marinate in my mind as I think about questions I want to ask about our upcoming event “Separating Hype from Reality in Alternative Fuels,” which will tackle one important aspect of the energy challenge on May 19).

Here’s a quick wrap of the highlights from what Gates had to say on a wide variety of questions this morning:

On the important role of cheap energy in creating the modern industrial society:

Gates said Vaclav Smil, a distinguished professor at the University of Manitoba, is one of his favorite authors on this subject. One book in particular of Smil’s, “Creating The 20th Century: Technical Innovations Of 1867-1914 And Their Lasting Impact,” has stuck with Gates. “When you look at why our society has done so well the past 300 years, a lot of it has to do with energy,” Gates said. But what worked so well as the U.S. became the world’s industrial superpower won’t work in a globalized world with 7 billion people and counting. In order to maintain the society as we know it, we will need to continue to produce cheap, abundant energy, but without all the CO2 emissions of fossil fuels. “It’s super-critical,” Gates said. “We need a breakthrough. Maybe multiple breakthroughs,” to create new sources of energy that are low-cost, and environmentally friendly.

On how climate change, and clean energy are connected with the Bill & Melinda Gates Foundation’s efforts to improve global health and development:

The foundation, Gates said, does a lot of work in sustainable agricultural practices, because about 70 percent of the poor people it focuses on have small farms. “Making them more productive is super-important,” Gates said. Clean air, clean water, and good growing conditions are obviously important for people in that situation if they are ever going to lift themselves out of poverty, he said.

On the role of government in the clean energy field:

People need to make a stronger case for more investment in basic research and development of cleantech ideas, Gates said. “You need a portfolio of investment,” he said, and while there appears to be money for “downstream” activities like building new power plants, there’s a lack of investment in the “upstream” creation of new knowledge that can lay the foundation for much better sources of power production. In terms of investment in basic R&D, industry is really nowhere to be found. “Only the government can do that,” Gates said.

On the opportunities for startups:

Yesterday, Gates said he met with Vinod Khosla, the legendary VC who spearheads cleantech investment for Khosla Ventures in Menlo Park, CA. Gates got a review of … Next Page »

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In an interview on the PBS News Hour last night, CIA Director Leon Panetta describes the U.S. raid on the Pakistan compound where Osama bin Laden was killed—saying that neither he nor President Obama watched the actual shooting of bin Laden as it happened inside the main building.

Yet both were apparently watching a live video feed of the attack while it was underway—a capability that reminds me of a chilling scene in the 1992 movie “Patriot Games,” where CIA analyst Jack Ryan (played by actor Harrison Ford) watches via satellite from a darkened control room as commandos raid a desert terrorist camp in the Middle East.

In a May 1 photo released by the White House, President Obama and his national security team appear to be watching something in the White House situation room—Secretary of State Hilary Clinton’s hand covers her mouth in a gesture of amazement—but the caption says only that the leaders are receiving an update on the mission against Osama bin Laden.

Meanwhile, in Plymouth, England, ZDNet UK editor Rupert Goodwins speculates that the system used to transmit the feed “was almost certainly the ArcLight mobile broadband system” from Carlsbad, CA-based ViaSat. ViaSat said almost three years ago that it had delivered a militarized, secure version of its “Communications On The Move” technology to the American Special Operations Command (USSOCOM) with additional deliveries expected throughout the U.S. military.

Obviously, a great deal of security has been built into the system, but Goodwins says the technology is not really that different from making a video Skype call with someone in Europe or Asia.

A statement from ViaSat in 2008 says the technology can be easily added to military aircraft equipped with an Air Force-certified hatch-mount terminal. It provides secure access to Department of Defense wide area networks while airborne at raw data rates of up to 512 kbps outbound.  ViaSat says the technology is built around its ArcLight commercial mobile broadband communications satellite network for private business jets and maritime applications operated by ViaSat and SES Americom Government Services.

In an e-mail this morning, ViaSat spokesman Bruce Rowe says it’s unlikely the company would confirm that its system was used to carry the live feed. “There is a great deal of speculation by the reporter in those stories,” Rowe writes. “He just made an educated guess based on our public releases.”

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The Startup America Partnership wants to make sure the little guy doesn’t get forgotten. That’s why San Francisco-based IndieGoGo turned up on a new list of companies contributing to the high-profile national job creation initiative last week. One of the first “crowdfunding” platforms, IndieGoGo helps individuals and organizations raise non-equity funding for their projects online. The company said it would contribute to the cause by cutting its fees in half to help these fledgling businesses get off the ground.

It’s an interesting tactic, given that when companies raise money through crowdfunding, they don’t usually think first about hiring people. Most crowdfunded organizations rarely collect more than $30,000 through this method—which makes it hard to hire people for anything other than occasional part-time work. I was curious about the jobs connection—so I contacted IndieGoGo CEO Slava Rubin and Startup America Partnership CEO Scott Case last week to get their perspective on crowdfunding’s role in creating jobs.

Slava Rubin

“It’s just a matter of time” before the first Facebook-scale company emerges from a crowdfunding platform, Rubin argues. “Three years ago, people used to say ‘No one will ever fund a small, for-profit business this way.’ Now, not only are they raising funding but you’re seeing it across every part of America, in many different industries.”

Building on the buzz over President Obama’s town hall meeting last week at Facebook headquarters in Palo Alto, the Startup America Partnership held a livestreamed panel at Facebook to announce it has obtained commitments from U.S. companies to provide an additional $400 million in services to American entrepreneurs. That’s on top of the roughly $360 million in commitments announced when the White House, the Kauffman Foundation, and the Case Foundation first unveiled the partnership in late January.

Case says the point of assembling these resources—which range from training programs to venture investments—is to increase the number of entrepreneurs who are able to take their businesses from the idea stage to the startup stage to the exponential growth stage, with the ultimate goal of creating more jobs. But when you look at the list of services being offered, most are geared toward established companies. Intuit (NASDAQ: INTU), for example, said it would pitch in $37 million in discounts on its financial software, while Microsoft (NASDAQ: MSFT) offered free access to its cloud computing platform, and Silicon Valley Bank said it would hold an “exclusive event” designed to bring the “America’s most promising entrepreneurs” together with venture capitalists and business mentors.

That’s why IndieGoGo stood out on last week’s list. Anybody can join IndieGoGo to raise cash for an idea. It could be an attempt to commercialize an invention (like the AlphaSphere, a futuristic musical instrument with 48 tactile pads) or realize a dream (like a concert tour for the Bucky Walters String Band from rural Humbold County, CA) or sustain a small business (e.g., Atlantis Books, a bibliophile’s haven on the island of Santorini in economically distressed Greece).

Crowdfunding is a model that dozens of organizations, such as new New York-based Kickstarter, are now pursuing. But IndieGoGo, backed by New York-based Penny Black and a number of individual investors, says it is still the world’s largest open funding platform. And the startup says that for the next three years, it will … Next Page »

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President Barack Obama will participate in a live “town hall” event at Facebook headquarters in Palo Alto, CA, on April 20, the company announced today in an event listing on its own site. Facebook co-founder and CEO Mark Zuckerberg and chief operating officer Sheryl Sandberg will host the event, in which Obama will answer questions submitted by Facebook members. The event will be live-streamed from the White House Facebook page at 1:45 pm Pacific time, 4:45 pm Eastern time. According to the event listing, the president “will connect with Americans across the country to discuss the tough choices we must all make in order to put our economy on a more responsible fiscal path, while still investing in areas like innovation that will help our economy grow and make America more competitive.”

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It’s time to close the books on the first quarter of 2011. As the editor around here, that means it’s time to look back at the journalism we did that broke new ground, shed some new light, or otherwise exemplified what we think is the best stuff we did to serve our readers the past three months.

We know people are very busy, and it can be exhausting keeping up with news on the Web, especially with so much half-baked, recycled, or aggregated content out there. We try to keep the quality of the journalism around here consistent, and high. My friend and colleague Greg Huang summed up our approach pretty well earlier today in his roundup for Boston readers:

“Every so often, we like to take a breath and look back at some of Xconomy’s top stories from the past few months. These are not necessarily the ones that generated the most traffic (though in some cases they are). They are stories that exemplify what we try to deliver to our readers day in and day out—real stories behind the companies, people, ideas, and trends that are shaping the future of innovation in our network of cities. What’s more, they help distinguish us from the media pack.”

Below you’ll see our top 20 tech and life sciences stories from the past quarter. But I’m actually leaving out Xconomy Seattle’s single most important story in the first quarter of 2010. It was the one where I introduced our new senior editor here in Seattle, Curt Woodward. He started on February 14—just seven weeks ago—and you can already feel he’s making an impact on our coverage, with scoops and in-depth insight on the local tech scene. The dude can flat out report and write, and he’s just getting warmed up. If you aren’t already following him, check out @curtwoodward and @xconomyseattle. And watch for more from this team in the second quarter and beyond.

The Top 10 Tech Stories

“Zaarly’s Wild Ride, Winning a Weekend, Quitting a Job, and The $100 Midnight Cheeseburger“

“Seattle’s Tech Job Crunch: How Long Can Valley Invaders Poach From Microsoft, Amazon, Before the Talent Well Runs Dry“

“Cheezburger, With Dreams of Domination in Internet Humor, Grabs $30M from Foundry Group, Madrona, Madrona, Softbank“

“Jeremy Jaech Leaves CEO Post at Seattle’s Verdiem“

“Obama’s Earmark Ban Could Ripple Through the Northwest Makers of Vaccines, Biofuels, Clean Water Technology“

“Nick Hanauer and Rich Barton’s Stealth Startup, King of the Web, Inches Closer to Revealing What’s Under that Crown“

“Geoffrey Moore: Why Middle Managers Are the New Kings, Stiff-Arming Shortsightedness, and the Money Chasm in the Mobile Social Sphere“

“Skytap, Fresh Off Boston-Led $10M Financing, Seeks to Make Cloud Computing Work Better“

“Amazon’s Multi-State Sales Tax Battles Are a Sideshow to the Real National Solution, and the Politicians Know It“

“Photorocket, Led by Amazon and aQuantive Vet Scott Lipsky, Uncloaks Its Not-Another-Photo-Sharing Service“

The Top 10 life sciences stories:

“Clarisonic Cracks Big-Time With $100M in Sales, Riding Rave Reviews From Lady Gaga, Oprah“

“Dendreon’s Warhorse, Chief Scientific Officer Dave Urdal, to Retire at Year End“

“Gates Foundation Makes First Equity Investment in a Biotech Startup, Liquidia Technologies“

“Mobisante Wins FDA Approval for Ultrasound on a Smartphone Technology“

“Gilead Pursues Cancer, Inflammation as Next Step to Diversify Beyond HIV“

“The Immunex Alumni: Where Are They Now?“

“NanoString, Snapping Up Genomic Health Veteran, Seeks to Prove Economic Value of Cancer Diagnostic“

“Calypso Medical’s New CEO Seeks to Steady Ship After a Rough Couple of Years“

“How ZymoGenetics Coulda Been a Contender: The Big Break That Came Too Late“

“Biogen Idec’s New R&D Boss, Doug Williams, Spurns the Corner Office for a Return to Science“

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This week seemed like as good a time as any to run a couple features on biotech VCs who are seeking to stay relevant as their business faces a serious identity crisis.

—SV Life Sciences, the $2 billion diversified healthcare fund with offices in San Francisco, Boston, and London, is feeling pretty flush with a new $523 million fund it raised last year. But all the carnage in the VC business has created a new challenge for SV. It only has a few peer VCs that it can syndicate with to carry biotech companies through the long, lean years of product development.

—Another one of the healthcare VCs I’ve met lately, Menlo Park, CA-based Canaan Partners, is still getting by on a $650 million fund it raised in February 2008, right before the financial crisis. Fortunately for Canaan, it has seen a string of positive news stories in its portfolio in the first quarter, including three companies lining up for IPOs. General Partner Wende Hutton predicts that Canaan will generate a lot more hits than the usual 1-in-10 rule of thumb that VCs consider to be a success.

—South San Francisco-based Portola Pharmaceuticals is regaining the full rights to a cardiovascular drug after its partner, Merck, decided to let it go after doing a review of its portfolio. CEO William Lis said getting full rights to the drug is a “transformative” event for Portola.

—Emeryville, CA-based Tethys Bioscience secured some critical support from the U.S. Air Force to run a clinical trial that could go a long way toward making its diabetes test a commercial success. The Air Force will conduct a 600-patient clinical trial to see whether Tethys’ test, which predicts which people are most likely to get diabetes, is actually able to help prevent diabetes by motivating patients to change their behavior. No word on when results are expected to arrive from this important study.

—Palo Alto, CA-based Affymax (NASDAQ: AFFY), the developer of a new anemia drug, raised $50 million in a new stock offering.

—One year has gone by since President Obama signed the healthcare reform bill into law. Plenty of people feared it would stifle drug prices and take away the incentive to develop innovative new drugs, but it didn’t happen, as I point out in this week’s BioBeat column.

—Last week, we gathered biotech leaders for a lively conversation about the 20-year outlook for the San Francisco Bay Area’s life sciences cluster. This event, Bay Area Life Sciences 2031, drew about 150 people to UCSF’s Genentech Hall. Check the photo gallery here.

—Stewart Lyman offered up a thorough analysis of biotech financing over the past couple years, which raises a very tough question on a lot of people’s minds: “Who will pay for drug development in the future?” Check out his first installment, and the second part. If you’ve got some biotech-related issue you want to get off your chest, we are always looking for guest posts like this. Just send them my way at ltimmerman@xconomy.com.

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Another week, another deal for Seattle Genetics. This company is clearly on a roll.

—Seattle Genetics (NASDAQ: SGEN) raked in another $8 million upfront payment this week from a big drugmaker that wants to use its technology for linking targeted antibodies to toxins that make them more potent. This time, Abbott Laboratories shelled out for rights to the technology, making this the 11th such licensing deal Seattle Genetics has signed. If Abbott reaches certain milestones, Seattle Genetics could collect another $200 million in payments, plus royalties on product sales.

—Seattle-based Omeros (NASDAQ: OMER) said it passed a mid-stage clinical trial with one of its lesser-known assets in development—a combination treatment for eye surgery to repair cataracts. This drug, OMS302, was able to maintain pupil dilation during surgery, and reduce postoperative pain and irritation. Omeros said it plans to advance the drug into the third and final stage of clinical testing usually required for FDA approval. The stock climbed about 10 percent on the news.

—The Allen Institute for Brain Science made a notable personnel move this week, hiring Christof Koch, a veteran neuroscientist on the faculty at Caltech, as its new chief scientific officer.

—A year has gone by since President Obama signed the landmark healthcare reform bill into law. Plenty of people feared it would stifle drug prices and take away the incentive to develop innovative new drugs, but as I point out in this week’s BioBeat column, it didn’t happen.

—Vancouver, BC-based Tekmira Pharmaceuticals kicked up a storm last week when it sued its longtime partner, Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) for more than $1 billion, accusing it of misusing trade secrets. Alnylam CEO John Maraganore says his company did no such thing, and he fired back with some choice words for the folks at Tekmira in this exclusive interview.

—Stewart Lyman offered up a thorough analysis of biotech financing over the past couple years, which raises a very tough question on a lot of people’s minds: “Who will pay for drug development in the future?” Check out his first installment, and the second part.

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There were a million arguments against healthcare reform a year ago. One was that if President Obama got his way and expanded health insurance to millions of uninsured people, and the government made a real effort to study the comparative effectiveness of drugs at high and low prices, it was really the first step toward government-imposed price controls on new prescription drugs.

Once you have government price controls, opponents argued, drugmakers will lose the windfall profits the marketplace offers today to companies that take the substantial risk to develop innovative new drugs. The U.S., in turn, would lose its competitive edge as the center of innovative pharmaceutical R&D.

Guess what happened? One year after Obama signed healthcare reform into law, drugmakers are still in the midst of a golden age. Drugmakers still command ever-higher prices for innovative new medicines. And they will almost surely continue to enjoy this kind of pricing power in the U.S. at least until the end of this decade.

The latest bit of evidence arrived last week in a report from the Government Accountability Office (GAO). The report said that brand-name drug prices climbed by an annual average of 8.3 percent from 2006 through the first quarter of 2010, compared with a 3.8 percent annual uptick in the consumer price index for overall medical goods and services. (When generics were factored in, the overall amount of spending on the 100 most commonly used drugs was a much more modest 2.6 percent annual increase, according to the GAO.)

Still, that’s a big rate of price increases for new brand-name drugs. Yet despite the evidence, plenty of people like to argue that we are starting to see a new era of “stealth” price controls that are part of healthcare reform.

When the FDA proposed the revocation of Genentech’s approval of bevacizumab (Avastin) for breast cancer in December, opponents of healthcare reform surmised the agency was actually cracking down on the drug because of its price—which isn’t the FDA’s job. The same point—about nameless, unaccountable bureaucrats exercising some hidden policy on behalf of price controls—was made in August when the FDA delayed Genentech’s application to market a supercharged version of Herceptin which is sure to have a supercharged price. And plenty of observers—me included—sensed that a hidden agenda against high-priced drugs was really driving Medicare’s decision to force Dendreon to publicly explain the safety and effectiveness of its new prostate cancer drug last November.

Whatever the true motivations are—and there are plenty of other reasons why government agencies might have made those decisions—I haven’t seen any compelling evidence that says … Next Page »

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Lexington, MA-based Imprivata is among the software companies that is benefiting from the push in the U.S. and abroad to adopt electronic health records. And the venture-backed company seems to have found its place in the healthcare field by streamlining the way clinicians securely access IT systems.

This year, the U.S. government starts paying out $17 billion in incentives—which were outlined in President Obama’s economic stimulus plan two years ago—for physicians that implement electronic health records according to certain “meaningful use” standards. While most physicians seem to think that the digitization of medical recordkeeping is good for patients, a poll showed last month that 60 percent of 500 physicians from on the doctors-only social network Sermo believed that using the records would prolong exam times. (Watertown, MA-based Athenahealth, which provides an online EHR, paid Cambridge, MA-based Sermo to conduct the poll.)

For many doctors, time is money. It might take an extra few minutes to enter login information to view a patient’s electronic record, and that’s not good. Omar Hussain, the chief executive of Imprivata, says that his company has been able to reduce login times to a few seconds. (For certain records systems, the firm provides the option of using a fingerprint scan or the touch of an ID badge swipe for people to access systems.) The key is offering speedy login times while maintaining security. There are strict regulations that guard the privacy of patient information, and hospitals are on the hook for any breaches in security. The need for quick access to health IT systems and the critical need to secure patient information has made so-called “single-sign on” technology like Imprivata’s a hot area.

Sentillion, an Andover, MA-based firm that was acquired by Microsoft last year, has software that addresses some of same access-management challenges. Imprivata has been busy trying to gain new customers in healthcare—in competition with Microsoft/Sentillion—and adding features to its core technology to set itself apart from its rivals. The firm, which also serves clients in multiple sectors (Hussain mentions clothier Neiman Marcus and the Vatican as customers), now gets about 60-65 percent of its business from healthcare, according to Hussain.

Imprivata set up a healthcare division in early 2010 and that segment of its business helped the firm drive 30 percent growth in revenue last year, Hussain says. (The company is private and he declined to release actual sales numbers.) This growth is likely music to the ears of the firm’s investors, which include General Catalyst Partners of Cambridge, MA, Highland Capital Partners in Lexington, Waltham, MA-based Polaris Venture Partners, and SAP Ventures. Hussain says that the company has raised a total of $50 million from investors.

The company says that its technology is now used at 700 … Next Page »

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The annual Healthcare Information Management Systems Society (HIMSS) just concluded the largest healthcare technology conference of the year with a record-breaking 31,225 attendees in Orlando, FL. The annual event includes the leading technology innovators and healthcare executives in the country. This year there were several distinct themes that will have an effect on any company or investor involved in healthcare. While themes like security and Accountable Care Organizations (ACOs) are staples, the following three represent significant and newer market opportunities.

Meaningful Use: The Health Information Technology for Economic and Clinical Health (HITECH) Act provides the U.S. Department of Health and Human Services with the authority to establish or promote IT initiatives and it’s well underway. The most visible initiatives are those involving cash reimbursements for adoption of electronic health records and efforts promoting health information exchanges—which was really sparked by the $19 billion set aside for this purpose in President Obama’s stimulus package two years ago. Under HITECH, eligible health care professionals and hospitals can qualify for Medicare and Medicaid incentive payments (and eventually penalties for lack of adoption) when they adopt certified electronic health record (EHR) technology and use it to achieve specified objectives (“Meaningful Use”).

It was clear at the conference in Orlando that the angst over Stage 1 Meaningful Use has subsided since the stimulus package created the opportunity two years ago. But there is plenty of uncertainty going forward. There is both a transition from Stage 1 to Stage 2 of the federal EHR incentive program and uncertainty about direction, as national health IT coordinator Dr. David Blumenthal prepares to return to Harvard in April

EHR vendors in particular are anxious given they will have to begin modifying and recertifying their products to meet the next round of requirements. (All products certified under Stage 1 will have to be recertified to meet Stage 2 criteria.)

mHealth – Mobile: The ubiquitous presence of smart phones in clinical settings and now the onslaught of tablet computing has brought mobile health front and center. Among many mobile-focused events at the Orlando conference, FierceHealthIT held a packed breakfast panel presentation entirely focused on the use of mobile devices and applications by leading organizations such as MD Anderson Cancer Center and the U.S. Navy. The general consensus seems to be that providers are demanding access to their applications on mobile platforms and IT organizations must meet the demand. Concerns around security are very addressable as explained by Captain Robert Marshall, MD, the chief medical information officer of the Navy.

Cloud Computing: Cloud computing represents a growing shift in market attitudes about the increasing confidence in the Internet as the platform, versus traditional software installations and sizeable hardware management issues. Not only are several of the giant EHR vendors now offering a subscription-based cloud solution (General Electric, Emdeon) but companies like eMix and LifeImage continue to build traction in delivering medical imaging through the cloud.

2011 will see the vast majority of healthcare IT expenditures flow toward the three categories mentioned above. Meaningful Use and the chasing of federal dollars will eventually fade away, but the second two categories are likely going to have a strong market influence for the foreseeable future.

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When most people hear the word “earmark,” they probably think of a bridge to nowhere, gilded Pentagon plumbing fixtures, or a dubious construction project in some fat-cat congressman’s hometown.

But federal earmarks can also fuel innovative research and development in life sciences, high tech, and clean energy—at least, they could until President Obama vowed to veto any of the direct grants in last month’s State of the Union speech.

I thought it would be interesting to see just what kind of spending the president would be cutting off for Washington state’s innovation community, so I put together this list.

It shows 25 projects that were seeking $2 million or more in earmarked spending, and the details are pretty interesting. Among the requests that stood out:

• Seattle’s PATH, a nonprofit global health R&D center, was hoping to get money for an array of projects, including $5 million for work on malaria vaccines and $2 million to develop large “electrochlorinator” devices, which use simple battery power to produce chlorine for purifying drinking water—a major global health concern.

• At Washington State University, researchers were seeking $3 million to support their work on capturing and storing high-energy positrons, $2.5 million for turning algae into biofuels, and up to $5 million to examine the ways that environmental toxin exposure can affect how genes are expressed in children.

• The University of Washington and Vancouver, WA-based Renewable Energy Composite Solutions were each hoping for $4 million or more to advance work on tidal energy technology for the Navy.

A little background for those unfamiliar with Capitol Hill lingo: Earmarks are specific, noncompetitive grants that members of Congress put in the federal budget to make sure dollars flow straight to the projects they want to finance back home.

Earmarks often become a political hot potato, but in reality experts say they only make up about 1 percent or less of the federal budget.

Howard Grimes is a vice president for research at WSU. He says the loss of earmarks isn’t leading to dramatic cuts or shutdown of the projects we listed. But it certainly crimps researchers’ … Next Page »

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Entrepreneurship has fueled economic growth and innovation throughout the Bay Area’s history. We applaud President Barack Obama’s call to action and the White House Startup America program to support entrepreneurs. In California’s innovation economy we have seen first hand that entrepreneurship is key to driving job creation and economic development.

The Federal bureaucracy can raise awareness and create fiscal incentives to promote innovation, but they are looking to industry and local organizations to assist in implementation, and BayBio is heeding the call to action by providing grass roots support to Bay Area life science entrepreneurs.

First and foremost, our entrepreneurs need capital. It’s out there. As of the third quarter of 2010, according to PriceWaterhouse Coopers, venture capital investment is on track to outpace 2009 by $500 million, and proposed legislation to provide matching grants for private investment and tax incentives for small business investment may help direct this capital to early stage companies. To increase visibility of early stage investment opportunities amongst our world class venture community, BayBio is holding the 8th Annual Life Science Entrepreneur and Investor Roundtables on February 24th. This iconic speed dating event for startups and investors and an excellent opportunity for entrepreneurs to network and get on the radar of key funders early.

BayBio is launching two new programs on February 24th. First, BayBio is bringing mentors to start up companies. The BioEntrepreneur Help Desk connects startup companies with experts from the Bay Area’s service community experts. Our startups often need help with the business side of their companies and the BioEntrepreneur Help Desk provides pro bono support for business planning, legal and other auxiliary services.

Second, we are introducing the BayBio Fellows Program, a one-year scholarship providing early-stage companies of seven employees or fewer with discounted rates on lab supplies and other services, best practice seminars, conferences, and other networking events.

Both the Entrepreneur Help Desk and BayBio Fellows Program will be launched at the Entrepreneur and Investor Roundtables, allowing participating entrepreneurs to access Help Desk experts and apply for the Fellows Program on site.

The Obama Administration has set the right tone by recognizing entrepreneurship’s key role in American innovation and economic competitiveness. The Northern California life science industry is out in front in making this happen at the local level.

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Last year at year end, I wrote about technology trends. Those trends, like the merger of the cloud and mobile devices, personalized medicine, reprogramming of human cells to cure disease, and the re-emergence of nanotechnology, still hold. Startups are breaking down impossible barriers in computing, biology, energy, and materials science. The USA is leading and will continue to lead the world with tremendous innovation.

However, this year, the big impacts are will be made at the politico-economic level. Will government free business to innovate? Will we drown in debt, heading toward our own Greek or Irish “austerity?” There has not been a more critical year for the country since 1980 when we had a choice to leave the Carter malaise behind. The innovation community needs signals and concrete deeds that we are valued so we have some certainty about friendly policies in the future. Here are four trends to watch in the coming year.

Trend 1. Rediscovering innovation and the private sector. I hope we will look back at 2010 and 2011 as the year the United States began to save itself, rediscovering that technology innovation is the key to our economic recovery, and even to our success as a nation in the coming years. Venture funded companies contribute 20 percent of GDP, from zero 40 years ago. This means freeing the private sector to innovate to create new business that will be central to our productivity and economic growth. I was hoping the Obama Administration would have grabbed hold of this agenda from the start, but I am less hopey-changey now. Nonetheless, President Obama received the message this fall and is already reaching out like never before to entrepreneurs, and with folks like Austan Goolsbee leading the charge and a tailwind of fierce and justified rage from free-market advocates, there is reason for hope.

Alternatively, it could be the year that we cede control of our future to government, led by state employee unions, and runaway federal and state spending and debt, miring the country in an anti-business economic malaise that will cause us to make Chinese the primary language taught in our underfunded schools. Our Federal elected officials like Sens. Cantwell, Murray, and most of the representatives from WA seem to “get” innovation and have been effective advocates in DC, but it is not clear the governing party quite understands that it is innovative and entrepreneurial companies that create jobs and lead the United States into the future, not government. Spend one day in China and the entrepreneurial optimism whacks you in the face like a 2×4. Maybe our leaders will re-discover this in 2011, or they will be the minority party in 2012 with a repeat of 2010.

Our state politicians are another matter. While the Washington state federal delegation on both sides seems to understand innovation, the State folks in power seem to say the words, but their deeds show that they are captured by the unions and the backward looking partisans … Next Page »

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1. FDA’s decision to remove the breast cancer indication from the label of bevacizumab (Avastin).

2. Approval of Dendreon’s sipuleucel-T (Provenge), representing a new class of drug.

3. Sanofi-Aventis’ pursuit of Genzyme. It illustrates an industry move towards adding orphan and rare therapeutic areas to pharma portfolios. Another example of the trend came when Pfizer created orphan disease research division in 2010 and acquired FoldRx Pharmaceuticals.

4. The amount of free drug supplied to patients in 2010 reached record highs according to PhRMA, which cited the economic downturn.

5. Increased collaboration between pharma and academic research centers, indicating a shift to go beyond biotech to fill pipelines. Examples include Pfizer’s collaborations with UC San Francisco, Washington University in St. Louis, and Sanofi’s collaborations with The Scripps Research Institute, Harvard University, and the Dana-Farber Cancer Institute.

Top 5 Things to Look for in 2011

1. An escalating legal battle over the constitutionality of President Obama’s healthcare reform legislation.

2. Implementation of the pharma tax, which is expected to raise $2.3 billion a year, and will target branded prescription drug sales of more than $5 million to Medicare and other government programs.

3. Rethinking biopharma and physician relationships in light of the implementation of the Sunshine Act in 2012.

4. Increased use of adaptive trial design and how/if the FDA will address this new approach to clinical development.

5. As the economy continues to recover, will the IPO window open up?

[Editor's Note: This is part of a series of posts from Xconomists and other technology and life sciences leaders from around the U.S. who are weighing in with the top surprises they've seen in their respective fields in the past year, or the major things to watch for in 2011.]

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Zipcar has added big money and big-name board members to its fleet, according to two different company announcements today. The Cambridge, MA-based car-sharing service said it has raised a $21 million Series G financing, with Meritech Capital Partners leading with a $20 million investment and Pinnacle Ventures contributing $1 million.

It also added a big corporate presence to its board, with the additions of AOL co-founder and former CEO and chairman Steve Case, and John Mahoney, vice chairman and CFO of Framingham, MA-based Staples. He’ll take a newly established Zipcar board seat, expanding the company’s board to nine members, and will chair the audit committee.

Case already has connections to Zipcar. His investment firm, Revolution, was the main owner of Seattle-based car-sharing service Flexcar, which merged with Zipcar in 2007. He also co-chairs President Obama’s National Advisory Council on Innovation and Entrepreneurship, of which Zipcar co-founder Robin Chase is a member.

Zipcar said the new money will go to financing fleet growth and geographical expansion, and funding capital needs. In June the firm filed for an initial public offering, looking to raise $75 million, to put towards paying off debt, working capital, expanding its services and fleet, and sales and marketing activities. In the first six months of this year, the company had $79.2 million in revenue, but posted a net loss of nearly $10.6 million, largely due to $86.7 million operating expenses, according to SEC documents. In April of this year, it acquired British car club Streetcar for a reported $50 million.

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“In the Obama Administration, entrepreneurs are welcome.” So said Aneesh Chopra, chief technology officer of the United States, in a keynote speech yesterday at “DC to VC,” a summit on healthcare IT investing organized by Morgenthaler Ventures partner Rebecca Lynn in San Francisco and co-sponsored by Silicon Valley Bank and Venrock. Speaking to a group of venture capital partners, entrepreneurs, and media representatives at the posh St. Francis Yacht Club, Chopra argued that under Barack Obama’s leadership, the federal government is doing more than ever before to adopt the latest infotech innovations coming out of Silicon Valley, and to shape federal regulation to encourage entrepreneurial solutions to big challenges like improving public health and nutrition.

I had a chance to delve into the specifics of the administration’s pro-entrepreneurship policies with Chopra in a one-on-one interview after his speech (see below). But the big picture, for the charismatic New Jersey-born son of Indian immigrants, is that the government sorely needs the ideas of its citizens—especially programmers—and that it can best stimulate those ideas by making the government’s vast troves of data more accessible to outside developers, and then getting out of the way to see what they build.

As a case in point, he cited the story of Dave Augustine, Bob Burbach, and Andrew Carpenter, three developers from San Francisco-based non-profit WestEd Interactive who came up with a new way to search the antiquated Federal Register as part of the Sunlight Foundation’s “Apps for America” contest. “The Archivist of the United States found out about Bob and Dave and Andrew in March, and said, ‘You guys have built the best killer app I’ve seen, can you rebuild the Federal Register website?’ and they said, ‘Sure,’” Chopra recounted. The new FederalRegister.gov, launched this summer, makes it easy to browse the once-impenetrable collection of government notices, rules, procedures, and documents by topic or date. “These were just random dudes who didn’t have lobbyists or procurement departments, but just smart ideas—’cognitive surplus,’ as Clay Shirky would say.’”

President Obama named Chopra as the nation’s first CTO in April 2009. As an associate director within the Office of Science & Technology Policy, Chopra’s formal assignment was to work with chief information officer Vivek Kundra to set federal technology policies that would make government more efficient and more transparent. “The goal is to give all Americans a voice in their government and ensure that they know exactly how we’re spending their money,” the President said when he appointed Chopra.

But Chopra has gone far beyond that initial charge, becoming known as an outspoken advocate for making government databases more accessible to developers of consumer software applications, using open source software more widely within government, and spurring innovation through prize-based competitions. Obviously, those are all causes dear to the hearts of most private-sector innovators and entrepreneurs, and Chopra has become a popular figure in Silicon Valley and other innovation hubs. Even before joining the Obama Administration, Chopra, the former secretary of technology for former Virginia Governor Tim Kaine, had been labeled a “venture governmentalist” for his efforts to invest in high-risk internal technology projects. Bay Area technology guru Tim O’Reilly has gone so far as to call Chopra a “rock star,” saying that he “understands that government technologists need to act more like their counterparts in Silicon Valley.”

In his speech at the Morgenthaler summit, Chopra gave numerous examples of the way the Obama Administration is opening government data to entrepreneurial uses. One was the Apps for Healthy Kids competition, a part of First Lady Michelle Obama’s campaign to reduce childhood obesity; the winners of the contest, which challenged entrants to create computer games or tools that make “fun and engaging” use of USDA nutrition data on 1,000 commonly eaten foods, were announced by the White House last month. Chopra said the developer of “Smash Your Food,” one of the winners of the $60,000 competition, got so excited about the power of software to help people eat better that he … Next Page »

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