[Corrected 1/16/12, 1:20 p.m. See below.] When Xconomy’s biotech editor Luke Timmerman first wrote about Axonia Medical in January 2011, he wondered if the Kalamazoo, MI-based startup would be able to raise the investment funds it needs, given the cautious venture-capital climate and the unprecedented nature of Axonia’s nerve-regeneration technology. The startup produces living, functional tissue-engineered nerve grafts in the lab that can replace and repair damaged parts of the nervous system.

Harry Ledebur, Axonia’s president and CEO, recently contacted Xconomy to let us know that the company has just raised its first million in seed financing from the Southwest Michigan First Life Science Venture Fund and expects to close on another $500,000 to $1 million in the next six months, bringing Axonia within reach of its goal of $3 million.

“I took quite a few meetings,” Ledebur said, describing what the past year has been like for the company. “I got a lot of valuable feedback, which I used to structure our strategic plan.”

The initial investment allows Axonia to formally kick off operations, with Accelerator‘s president and Chief Business Officer Dave Schubert serving as chairman of the board. The company also was invited to join the Rutgers-Cleveland Clinic Consortium of the Armed Forces Institute of Regenerative Medicine (AFIRM), which may offer Axonia a small grant in the future to support support preclinical studies for peripheral nerve injury using its tissue-engineered nerve grafts. [An earlier version of this paragraph listed the wrong title for Dave Schubert. We regret the error.]

“It’s a validation of our approach,” Ledebur says of the opportunity of join AFIRM. “Our technology fits with the current medical needs of the Department of Defense’s Wounded Warriors program.”

The concept of Axonia’s technology, which is spun out of the University of Pennsylvania, hinges on the production of axons, the long thin parts of nerve cells that carry signals to distant target cells. Unlike other regenerative treatments in development, Axonia’s method doesn’t involve stem cells. Rather, Axonia uses neurons from patients or cadavers to grow long, integrated tracks of axons in the lab and then implants this tissue into the body, which then enables or accelerates the body’s natural repair system.

“Axons seem to be the key catalyst in the repair process,” Ledebur explains. “We’re the only company, to my knowledge, that knows how to grow fully differentiated nervous tissue.”

The results so far in rodent models are promising with patients who have peripheral nerve damage, spinal cord injuries, and brain injuries—injuries that the body has a very difficult time repairing on its own. He estimates that millions of U.S. patients per year with nervous system injuries could utilize Axonia’s proprietary process, which the company says represents a $1.2 billion market.

Axonia has already acheived its proof of concept in a rat model of spinal cord injury. The next step, Ledebur says, is to test it in pigs. If all goes according to plan, Axonia will begin clinical trials in roughly three years.

“We’re focusing our money now on proving the superiority of our standard of care,” Ledebur adds. “We want to repair what’s currently unrepairable.”

Comments (1) | Reprints | Share:          

A federal court ruling issued before the Thanksgiving holiday appears likely to end nearly three years of patent litigation between Histogen, a San Diego regenerative medicine startup, and Carlsbad, CA-based SkinMedica, which provides cosmetics and skin-care products.

“We are happy to now have this matter officially behind us,” Histogen founder and CEO Gail Naughton says in a statement issued today by the San Diego startup.

The Nov. 21 ruling issued by U.S. District Judge Janis Sammartino concludes that Histogen is not infringing on two key SkinMedica patents. “The cloud has lifted for us,” Histogen spokeswoman Eileen Naughton Brandt told me this afternoon.

A spokeswoman for SkinMedica declined to comment today.

In its patent infringement lawsuit, SkinMedica alleged that Histogen and its cosmetics subsidiary, Histogen Aesthetics, were infringing on the patents covering its “NouriCel” product line and related proprietary technology for culturing human cells in growth media.

Histogen is focused on the long-term development of living tissue skin grafts and related products that would require regulatory approval. To generate revenue in the meantime, however, the startup formed Histogen Aesthetics to develop its own brand of skin care and dermatology products. Histogen says it also has begun early tests of a hair replacement product made of growth factors and other compounds expressed by fibroblasts, the cells that form connective tissue.

In her 14-page ruling, Sammartino distinguishes between SkinMedica’s patented process for growing a three-dimensional matrix of living human cells and Histogen’s approach, which encourages living cells to grow on the surface of microscopic beads. The cell-covered beads eventually clump together, and also grow into a three-dimensional matrix. By drawing a clear distinction between the two processes, Sammartino rejects SkinMedica’s arguments that the two approaches were equivalent.

The judge’s Nov. 21 ruling was preceded by a related ruling in May that addressed the meaning of more than a dozen disputed terms used in … Next Page »

Comments (1) | Reprints | Share:          

ViaCyte, a San Diego preclinical cell therapy company focused on diabetes, says today the company’s chief technology officer, Allan Robins, has been named acting CEO following the departure of chief executive John West, who resigned for personal reasons. The company, which is partly funded by the California Institute for Regenerative Medicine, also promoted Kevin D’Amour to chief scientific officer. The company says West will continue with the company as a consultant and board member. Meanwhile, ViaCyte’s board has begun the search for a new CEO.

Comments | Reprints | Share:          

When I met Organovo CEO Keith Murphy last year, he was searching for commercially viable products the San Diego startup could use to support its business while advancing its long-term goal of using living cells to create kidneys and other vital organs.

More recently, a visibly excited Murphy told me he’s discovered an unmet need for Organovo’s technology among Big Pharmas, and the company’s new customer base is growing. In fact, Organovo has been generating enough revenue from a series of new partnerships that Murphy says he’s put off an expected Series A venture round.

“Back in the early part of last year we were thinking about raising capital, but have been able to avoid that because we’re getting sufficient revenue from partnership deals at this point to grow the company,” Murphy wrote in an e-mail yesterday. He told me earlier the deals had helped Organovo become nearly self-sustaining, and more are in the works. “I won’t say we’re in the black, but our burn rate has been quite low this year.”

As I explained last year, Organovo was founded four years ago on technology developed by Gabor Forgacs of the University of Missouri. Since then, Murphy says the company has raised just over $2 million from private investors to develop “bio-printing” technology that operates much like an inkjet printer. Instead of laying down ink, however, Organovo’s bio-printer lays down a pattern of cultured cells and a jello-like hydrogel that supports the cells in a 3-D structure. In this way, Organovo already has been able to grow bio-engineered blood vessels, and to lay more ambitious plans to create kidneys, livers, and other vital organs in the same way.

Such bio-engineering of organs is not a particularly new field; the basic took root decades ago. Anthony Atala of the Wake Forest Institute for Regenerative Medicine, for example, was the first to use similar technology to create new bladders. A key advantage of the technology is that it avoids host rejection complications by using a patient’s own cells to create new tissue. Still, the work is still highly experimental, so getting regulatory approval to graft a bio-engineered blood vessel in a living patient will take years.

In the meantime, Murphy found a burgeoning market among pharmaceutical companies by creating what he calls 3-dimensional “constructs” of diseased or dysfunctional human cells that can be used as models for testing new drugs. Creating a 3-D matrix of cells enables each cell to interact with adjoining cells, so they react to drug compounds much as they would in the body.

For example, Murphy says conventional drug testing on liver cells has been complicated because the cells flatten out in a petri dish—and as that happens … Next Page »

Comments (3) | Reprints | Share:          

After completing its $750 million acquisition of San Diego-based regenerative medicine company Advanced BioHealing (ABH) on June 28th, Irish drug giant Shire (NASDAQ: SHPGY) is going on a minor hiring binge.

ABH plans to hire 50 new employees in San Diego, according to ABH CEO Kevin Rakin. The company now employs 256 people at its manufacturing and laboratory space on Torrey Pines Mesa where ABH makes Dermagraft patches, which are bio-engineered from human skin cells and used as grafts to treat diabetic foot ulcers.

The deal was strategic for Shire in several ways, Rakin told me during a recent interview by phone. ABH is joining Shire’s Specialty Pharmaceuticals business, which enables ABH to also take advantage of the biologic manufacturing expertise in Shire’s Human Genetic Therapies business. While Shire also operates a major site in Switzerland and in the Philadelphia area, Rakin says the company gains a West Coast base with the ABH deal.

“They are a smart acquirer and a smart integrator,” said Rakin near his office in Westport, CT, home to an office of Canaan Partners, which helped to found ABH in 2006, and held roughly a one-third stake in the ABH. “They plan to use the ABH acquisition to network around the West Coast, and identify other companies and other technologies. So we are the cornerstone of a new business area for them.”

As I reported in May, the deal proved to be a windfall for Canaan. The venture firm is realizing an extraordinary 15x return for its $15 million investment in ABH.

Rakin, who was a Canaan executive-in-residence before joining ABH, told me the company’s business has been strong. Sales of ABH substitute skin patches grew from $9 million in 2007 to nearly $147 million in 2010, and is are expected to hit somewhere between $180 million and $200 million this year. ABH already has hired 151 employees so far this year, including 76 based in San Diego.

“We were just growing in concert with market demand, and in anticipation of our IPO,” said Rakin. ABH cancelled its IPO just a day before it was scheduled, after ABH and Shire had agreed on terms of the deal. ABH had set a price range between $14 to $16 a share for an offering of more than 13.4 million shares, which would have raised at least $187.6 million for the company.

Now ABH is looking to fill a variety of openings that range from research & development to operations, manufacturing, and warehouse shipping and receiving.

Comments | Reprints | Share:          

San Diego-based Histogen, a four-year-old biomedical startup, claimed a key victory today after a federal judge issued a series of findings in a patent infringement case filed in 2009 against the company by a cross-town rival, Carlsbad, CA-based SkinMedica.

Before the suit was filed, Histogen had plans to develop products derived from skin cells grown under simulated embryonic conditions. SkinMedica, a venture-backed company founded in the mid-1990s, provides a variety of cosmetic and skin care products made of a “patented blend of growth factors, soluble collagen, antioxidants and matrix proteins” derived from laboratory-grown skin cells.

In a May 24 ruling, U.S. District Court Judge Janis Sammartino addressed the meaning of more than a dozen disputed terms used in the companies’ patent filings. The judge agreed in many cases with the way SkinMedica had defined its claims, but Sammartino ruled that Histogen’s use of “microcarrier beads” to grow fibroblast cells was outside the scope of SkinMedica’s patent claims. In its statement, Histogen calls that a key finding that is central to its patent claims, and predicts the ruling “should lead to the trial court’s dismissal of the case.” A spokeswoman for SkinMedica declined to comment, saying it was the company’s policy to not comment about ongoing litigation.

The Histogen statement also quotes Gail Naughton, Histogen’s founding chairwoman and CEO, as saying the court’s order supports Histogen’s assertion that its methods and products are unique. “It will allow us to raise the additional capital to continue the development of our lead therapeutic products, and will re-start partnership discussions, all of which have been slowed by this litigation since January 2009.”

Comments (3) | Reprints | Share:          

The $750 million sale of Advanced BioHealing to the Irish drug giant Shire Pharmaceuticals, announced on Tuesday, has been hailed as a rare win for regenerative medicine, with an extraordinary 15x return for Canaan Partners, the venture firm that helped to found the company just five years ago.

But as I noted in a 2009 profile of Advanced BioHealing’s San Diego operations, the development of the company’s bio-engineered human skin substitute extends back quite a bit further—almost 20 years—to San Diego’s Advanced Tissue Sciences (ATS). After pioneering the technology in the 1990s, Advanced Tissue Sciences filed for bankruptcy liquidation in 2002, having raised hundreds of millions of dollars from venture investors, and later from shareholders as a public company. ATS sold the global rights to Dermagraft and its San Diego manufacturing facility to the British company Smith & Nephew in 2003.

Smith & Nephew was ready to sell the Dermagraft business to Canaan by 2006—after spending three years and millions of dollars more in a second bid to commercialize the technology.

Stephen Bloch, the Canaan general partner who pulled the deal together, tells me that as much as $300 million in total might have been invested to commercialize Dermagraft before he entered the picture in 2006. In other words, roughly $300 million of capital that was invested to develop the technology and win FDA approval was basically written off before Canaan stepped in to restart the business for the third time.

Stephen Bloch

Bloch told me by telephone that in the ensuing years, venture investors sunk about $40 million to re-capitalize the business. He also confirmed that Canaan’s $15 million investment is expected to yield a roughly $225 million payout, “cash on cash,” as he put it, in the Shire acquisition. Safeguard Scientifics, which invested about $11 million in venture capital, is expected to see a roughly $140 million return. Other investors accepting congratulations for their prescience are CDIB Bioscience Ventures, Channel Medical Partners, Horizon Technology Finance, Red Abbey Venture Partners, and Wheatley Partners.

As other reports on this deal have noted, Shire’s buyout offer for Advanced BioHealing was announced just a day before … Next Page »

Comments (1) | Reprints | Share:          

Irish drug giant Shire (NASDAQ: SHPGY) is making a big push into regenerative medicine by shelling out $750 million in cash for Advanced BioHealing, according to a press release. Advanced BioHealing–which is based in Westport, CT, and has manufacturing and lab space in La Jolla, CA—makes Duragraft, a bio-engineered skin substitute used to treat diabetic foot ulcers. The product brought in $146 million in sales last year. Shire said in the statement that Advanced BioHealing “compliments Shire’s existing specialty focus and biologics manufacturing capability.” The deal comes just one week after Shire CEO Angus Russell told journalists in New York (including Xconomy) that the company is looking to boost its capabilities in regenerative medicine.

Comments | Reprints | Share:          

StemCells Inc., the Palo Alto, CA-based developer of regenerative medicines, said today it has cut 30 percent of its U.S. workforce to conserve cash while it runs trials of its treatment for spinal cord injuries. Cutting 20 jobs is supposed to save the company $2.3 million a year in expenses, the company said. StemCells (NASDAQ: STEM) said it had $22.9 million of cash and investments in the bank at the end of March, and is on an annual pace to burn through about $18 million of cash.

Comments | Reprints | Share:          

San Diego’s Histogen, which saw a group of angel investors pull out of a deal in early 2009, is announcing today that it successfully closed a $10 million Series A round and already has opened a Series B venture round with commitments from some investors.

The life sciences company, which is developing regenerative medicine treatments based on newborn cells grown under embryonic conditions, says investors in its Series A round include Secure Medical, Leonard Lavin, Lordship Ventures, and Angus Mitchell.

Histogen had opened its Series A financing in May 2008, but the early stage startup was dealt a potentially crippling blow in early 2009. A crosstown rival, Carlsbad, CA-based SkinMedica, filed a patent infringement lawsuit as Histogen was near closing on $2.4 million in additional funding. The unexpected litigation caused the deal to collapse, forcing Histogen to lay off all 36 of its employees, and sent founding CEO Gail Naughton scrambling for new sources of funding.

The litigation between SkinMedica and Histogen has continued apace since then, although the case is confined to its ReGenica line of skincare products, according to Histogen spokeswoman Eileen Brandt. “With the exciting data we have gained over the past year, particularly in hair and cancer applications, Histogen has regained a strong position with investors and potential partners despite the lawsuit,” Brandt told me in an e-mail yesterday.

Histogen also moved recently into a new facility on Sorrento Valley Road that will enable the company to expand manufacturing for its upcoming clinical trials, and later commercial production, Brandt said. The company currently has 17 employees.

In Histogen’s statement, CEO Naughton said, “With the Series A completed, we are excited to build on the momentum Histogen has created over the past two years, and further advance the Company’s rich product portfolio. We have made significant strides in several important research areas, advanced partnership discussions, and are on track to reach key value inflection points in 2011.”

Histogen says it is scheduled to begin an early stage clinical trial of its Hair Stimulating Complex (HSC) in Singapore in the spring of 2011. The company hopes to also begin a clinical study of its soluble human extracellular matrix (hECM) for the treatment of carcinomatosis, a rapidly progressing and debilitating cancer, mid-year.

Comments | Reprints | Share:          

ModeRNA Therapeutics, a new startup out of Cambridge, MA-based Flagship VentureLabs, announced it has developed a method for producing human induced pluripotent stem cells, which are embryonic-like stem cells that are formed by reprogramming adult stem cells. Flagship and three other scientists co-founded the startup this summer with an undisclosed amount of Series A funding, as first reported by Dow Jones VentureWire this morning.

The research team behind ModeRNA, based out of Children’s Hospital Boston and led by Derrick Rossi, said the stem cells formed with the new method could be used to create an array of cells that can be useful in medicine—such as blood cells, neurons, and muscle cells. Rossi, who is also connected to the Harvard Stem Cell Institute, started ModeRNA alongside Kenneth Chien, who leads the Massachusetts General Hospital Cardiovascular Research Center, and MIT biochemist Robert Langer, according to VentureWire. The startup is backed by Flagship and one another undisclosed investor, Flagship general partner Doug Cole told me on a phone call this morning.

ModeRNA’s research team developed synthetic, chemically modified RNA that can incite cells to reprogram, while avoiding detection by cells’ anti-viral defense systems, which typically target messenger RNA (mRNA) involved in reprogramming cells to function like embryonic stem cells, according to the announcement. The researchers published their study online last Thursday in the journal Cell Stem Cell.

San Diego-based Fate Therapeutics is also working on technology to spur adult cells into functioning like embryonic stem cells, for use in the pharmaceutical field. The ModeRNA research team says that its modified RNA technology could be useful in regenerative therapies, by helping to incite the formation of muscle cells, or in boosting cell’s production of certain proteins, to treat diseases such as cystic fibrosis.

The company isn’t saying much about its specific plans for commercializing its modified RNA technology. But Cole said, “It’s generated a lot of excitement in the marketplace.”

Comments (2) | Reprints | Share:          

The sector was firing on all burners in the past week with fresh developments in devices, drug development, wireless health, and weight loss (just ask Larry Smarr). You can catch all the latest here.

—Sequenom (NASDAQ: SQNM), which scrubbed the launch of its diagnostics test for Down syndrome a year ago over “mishandled data,” is resuming development on a new testing schedule. The company also raised $51.6 million for R&D, commercial product development and general corporate purposes.

—Cytori Therapeutics reported (NASDAQ: CYTX) announced encouraging results from two small, placebo-controlled studies of its fat-derived regenerative cell therapy in cardiac patients. The double-blind studies, which were conducted in Europe, should pave the way for a larger test in 150-250 heart attack patients, the company said.

—Pathway Genomics fired the next salvo in the personal genome-testing wars with its announcement that it will begin selling genetic tests this week at 80 percent of Walgreens stores nationwide. Consumers can choose the $249 test that looks for a total of 46 genetic and health conditions, or a $179 test  that will look for either 23 genetic conditions or 23 health conditions.

—Sotera Wireless CEO Tom Watlington told me the company is preparing to test the ViSi, a wireless device that continuously monitors blood pressure, respiration, temperature, blood oxygen levels and heart rate, at five Southern California hospitals. If ViSi works, Sotera could begin marketing the device to hospitals during the first quarter of 2011, he said.

—Two San Diego companies were recognized for their innovations at the Wireless Life Sciences Investor Meeting in La Jolla, which was attended by 200 people, nearly double last year’s number. CortiCare, of San Diego, which provides remote and continuous electroencephalography monitoring of patients admitted to a hospital intensive care unit for signs of micro-seizures, was a finalist in the Best Clinical Applications category. Great Connections, which just moved to San Diego from Sweden, has technology that transmits ultrasound and X-ray medical images to any mobile device.

—Luke chatted with Internet pioneer Larry Smarr about his personal … Next Page »

Comments | Reprints | Share:          

San Diego-based Cytori Therapeutics (NASDAQ: CYTX) is announcing encouraging results this morning from two small, placebo-controlled studies of its fat-derived regenerative cell therapy in cardiac patients. The double-blind studies, which were conducted in Europe, should pave the way for a larger test in heart attack patients, the company says.

The first study involved 27 chronic heart disease patients; 18 got cell therapy and 9 received a placebo. After six months, the treatment group showed  improvements on key measures of oxygen consumption and aerobic capacity. By contrast, the placebo group’s performance on those key measures declined. The differences between groups are statisically significant, the company says.

Specifically, the treated group showed an average 3.6 percent improvement in maximum oxygen consumption compared to an average 18.4 percent decline in the placebo group. Aerobic capacity in the treated group as measued by metabolic equivalents (METS) rose .2 points compared to a drop of .8 points in the placebo group.

The second study involved 14 heart attack patients; roughly two-thirds received cell therapy within 24 hours after arriving at the emergency room, the remaining patients were in a placebo group. Although the study was too small to demonstrate statistical validity, the treatment group showed a stronger improvement trend.

No serious side effects related to treatment were seen in trials, Cytori CEO Marc Hedrick tells me.

It’s important to note that each study excluded … Next Page »

Comments | Reprints | Share:          

Few life sciences companies have gotten as much mileage from a pilot trial that enrolled two dozen patients as San Diego’s Histogen, a startup developing a variety of therapies derived from human cells that are grown in the laboratory. On the other hand, we have discovered at Xconomy that the appetite for news about potential treatments for baldness is unusually high.

Histogen has announced a one-year follow-up study of 24 patients who participated in an experiment using its Hair Stimulating Complex, or HSC, shows “statistically significant” new hair growth. Participants in the study, which was done in Honduras, also showed a statistically significant increase in hair density.

The latest findings basically extend results that Histogen reported last July from the study, in which HSC, which consists of certain proteins and other molecules secreted by human fibroblast cells grown in a laboratory culture, was injected just below the scalp. The persistence is what’s significant in the latest study, Histogen founder and CEO, Gail Naughton, tells me by phone.

“Most of the experts asked, ‘How long will it last before hairs drop off?’ ” she says. Naughton adds that currently approved treatments for baldness, such as finasteride (Propecia) or monoxidil (Rogaine), must be used every day to prevent hair loss. She maintains that Histogen’s treatment appears to have some lasting effect, at least in 85 percent of these patients.

Histogen Study Results

Histogen laid off all 36 of its employees last year after its fund-raising efforts were knocked into a hat when a cross-town rival, Carlsbad, CA-based SkinMedica, filed a patent infringement lawsuit against the startup. With the case still pending, Naughton says Histogen managed to raise additional funding needed to keep a core group of 12 employees working, and to support the follow-up research. Since my last update three months ago, Naughton says Histogen also has gotten a commitment for substantial funding needed to underwrite additional research in Singapore.

Comments (4) | Reprints | Share:          

One of the more intriguing experimental drugs for multiple sclerosis has just entered its first clinical trial. Cambridge, MA-based Biogen Idec (NASDAQ: BIIB) has now started what it believes to be the first-ever clinical trial of a drug with the potential to regenerate the fatty protective coating around nerves that gets damaged in people with multiple sclerosis.

Biogen plans to enroll 64 healthy volunteers in the Netherlands, who will get a single intravenous infusion of what’s being called BIIB-033, says company spokeswoman Tracy Vineis. The study, listed in detail here on clinicaltrials.gov, will look at whether the targeted antibody drug is safe and well-tolerated, along with measurements on how long it stays in the body. Results from this initial test should be available in 2011, Vineis says.

This trial is more interesting than the usual run-of-the-mill study. That’s because the current standard treatments for MS, a neurodegenerative disease, are only thought to slow down the progressive damage of the disease. Biogen scientists hope to change the paradigm of treatment with this newer drug, by developing an antibody that blocks a new target called the Lingo-1 protein. By hitting this marker on cells, the company hopes that it will restore the body’s natural process of building a fatty protective layer around nerve fibers, known as myelin. As I described in an in-depth feature on the program back in August 2008, this is sort of like putting rubber coating back around electrical wires so they don’t short-circuit.

“As far as we know, this is the first drug in clinical trials with the potential to repair MS damage,” Vineis says. “We’re very excited about it.”

It’s too early to say what Biogen’s ultimate strategy will be for the best use of the anti-Lingo1 antibody. But it’s possible that patients could start on existing drugs that stop the progressive nerve damage, and then switch to the new drug that regenerates the protective myelin coating. If Biogen can prove the drug is safe, and does what it is supposed to do scientifically, this could be a very big deal in a few years for the 400,000 or so people in the U.S. with multiple sclerosis.

Comments (4) | Reprints | Share:          

There were new developments over the past week in some big ongoing stories.

—Histogen CEO Gail Naughton told Bruce the San Diego-based biotech expects to report results from a one-year follow-up of study of its experimental baldness treatment by the end of this month. Histogen plans additional clinical studies on volunteers with male-pattern baldness—all of them in Asia. (Sorry, guys.)

— The job market in San Diego’s life sciences industry is showing signs of, well, life. Recruiter Meredith Dow of Proven Inc. told me that layoffs appear to have slowed and some biotech startups are beginning to talk about hiring. Some occupations have a brighter outlook than others, she noted.

—Illumina (NASDAQ: ILMN), the San Diego-based tools company, introduced a machine that can decode an individual’s genome for under $10,000 in a bid to establish the company’s leadership in the gene-sequencing business.

—Sequenom (NASDAQ: SQNM) agreed to pay shareholders $14 million from its insurance proceeds and issue them new shares worth a 9.95 percent stake in the company to settle a class action suit. The settlement, which requires court approval, would resolve one problem related to what the company characterized as the mishandling of data from a clinical trial involving the company’s experimental Down syndrome test.

—Crinetics Pharmaceuticals, a San Diego startup developing biosensors for drug discovery applications, signed a collaboration agreement with the Ferring Research Institute, the peptide research center established in San Diego by Ferring Pharmaceuticals.

Comments | Reprints | Share:          

San Diego-based Histogen became something of a high-wire act on the local biotech scene last year after a cross-town rival filed a patent infringement lawsuit against the startup—upending Histogen’s plans to develop a variety of regenerative medical treatments.

The patent suit, which was filed a year ago by Carlsbad, CA-based SkinMedica, hit just as Histogen was preparing to report early results of its experimental treatment to stimulate hair regrowth among 24 men with male-pattern baldness. As we reported at the time, the prospect of costly litigation prompted a group of angel investors to withdraw their planned $2.4 million investment, and Histogen was forced to lay off all 36 employees.

At that time, it seemed likely that the teetering startup was headed for a fall, and Histogen would soon be history.

That still could be the outcome. Lawyers for Histogen filed a request for a summary judgment last August that would dismiss the case. Lawyers for SkinMedica filed their response in September, arguing to keep the lawsuit on track and headed for trial. I reviewed the filings in San Diego federal court yesterday, and U.S. District Judge Thomas J. Whelan has yet to rule on the arguments over Histogen’s bid for an early dismissal.

Meanwhile, as I reported in an end-of-the-year summary, many Xconomy readers continue to root for success in Histogen’s experimental treatment for male pattern baldness.

But we haven’t heard much from Histogen since July, when the startup reported final results of its early study. In the experiment, a single injection of the company’s hair regrowth product—formerly known as ReGenica, now called Hair Stimulating Complex, or HSC—was made just beneath the scalp. Histogen says nearly 85 percent of the two dozen balding men had more hair three months after being treated, and they experienced an increase in hair thickness and density.

To get an update, I recently spoke by telephone with Histogen CEO Gail Naughton, who highlighted the company’s latest plans for … Next Page »

Comments (6) | Reprints | Share:          

[Corrected 12/13/09, 9:45 am. See below] San Diego’s Cytori Therapeutics (NASDAQ: CYTX) is reporting encouraging interim results today concerning its breast reconstruction technology at the 32nd Annual San Antonio Breast Cancer Symposium.

Cytori has been developing its treatment for women whose partial mastectomy or lumpectomy has left a soft-tissue crater or deformity, as well as for women seeking breast enhancement or augmentation. The company’s approach combines regenerative medicine with a procedure increasingly used by plastic surgeons in which a patient’s own fat cells are used to rebuild an asymmetric breast. Cytori’s technique includes using its proprietary technology to process the patient’s fat cells to increase the concentration of (adipose) stem stem cells before they are implanted, a procedure Cytori calls a “cell-enriched” fat graft.

Cytori says 73 percent of the patients and 82 percent of their physicians expressed satisfaction with the overall outcome six months after the procedure, according to a follow-up study of the first 32 women who were treated.

[Corrects Tom Baker's title to director of investor relations] “It’s an interim look at the 71 patients who have been enrolled and treated,” says Tom Baker, Cytori’s director of investor relations. “The importance to Cytori is that this study is geared to getting [insurance] reimbursement in Europe for this treatment using our device.”

The company also is working to gain FDA approval of its technology in the United States. Cytori said in July that the FDA had determined that its Cellution stem cell concentration system should be regulated as a medical device. The determination clears the way for Cytori to seek FDA approval for use of the system “as a medical device in aesthetic body contouring and/or filling of soft tissue voids.”

Cytori’s Baker says breast cancer patients who have undergone surgery and radiation treatment represent a trickier challenge for cosmetic surgeons. While a simple “autologous fat graft” is possible in breast cancer patients, Baker says irradiated tissue is damaged, and therefore less receptive to a graft. Even with healthy patients who choose the procedure for breast augmentation (instead of breast implants), plastic surgeons report they often see a disappointingly high rate of complications—and the almost complete reabsorption of the grafted fat.

Cytori says its technology offers a higher success rate because because the stem cells used to enrich the fat graft promote the growth of blood vessels, which nourish the grafted fat cells, as well as supportive cellular scaffolding. Baker says Cytori recently established a website to explain its breast reconstruction technique.

“We’d like to show that we can perform this, and that it improves the chances of graft survival,” Baker says.

Comments (9) | Reprints | Share:          

Sports fans know how a knee injury ruined the last season for beloved New England Patriots quarterback Tom Brady, and many other athletes before him. Now Connective Orthopaedics , a Waltham, MA, medical devices startup, is quietly researching new products that could potentially improve recoveries for people after they undergo knee surgery.

Connective CEO Dean Banks told me that the vision of the company is to eventually provide products that help torn ACLs (short for anterior cruciate ligaments) in the knee to heal themselves, as opposed to the standard treatment of replacing the damaged ligaments with tissue taken from other parts of a patient’s body or from a donor source. The startup has been attracting attention in the sports world by adding Boston Celtics CEO Wyc Grousbeck to its board of directors in June. (It turns out that Connective’s Banks and the Celtics’ Grousbeck go way back—they used to work together at Highland Capital Partners in Lexington, MA.)

Banks declined to give specifics about his company’s technology, but he showed me a recently published study to give me an idea. The study indicated that pigs that had reconstructed ACLs that were wrapped in a collagen-platelet scaffold healed back to normal better than the pigs that went without the scaffolds to help mend their ACLs after reconstructive surgery. Collagen is the ubiquitous protein that supports organ structure in the body, and platelets are blood cells that contain growth-stimulating proteins. Though Connective isn’t saying whether it’s developing a collagen-platelet product, the firm is clear that it wants to develop products that promote tissue healing. The secrecy is one indication of the fierce competition Connective is facing.

“We are really, really intent on staying in stealth mode because … Next Page »

Comments (3) | Reprints | Share:          

San Diego’s Cytori Therapeutics (NASDAQ: CYTX) says it is raising $850,000 today by selling shares to Seaside 88, a fund managed by Orlando, FL-based Seaside Capital Management, under a private placement agreement. Cytori, which has been developing regenerative medicine technologies for breast reconstruction and other treatments, says Seaside has agreed to purchase as many as 7.15 million shares over the next year—enabling the biotech to raise roughly $20 million, depending on share price. Cytori, which is selling shares to Seaside 88 through a shelf registration, says the purchases are scheduled to take place every two weeks, at a price determined by applying a 13 percent discount to the volume weighted average price per share of Cytori’s common stock.

Comments | Reprints | Share: