This was a great year for Seattle biotech if you measure success through sheer number of acquisitions. But if you prefer to measure the health of an innovation community by the number of exciting new startups it hatches, then this was most certainly a down year.

That’s the mixed bag of returns that I saw when looking back at the news of 2011 from the Seattle life sciences scene. This was the year of the acquisition for Calistoga Pharmaceuticals, Pathway Medical Technologies, Calypso Medical Technologies, SonoSite (NASDAQ: SONO), Amnis, Geospiza, and Pacific Biosciences Labs (the maker of the Clarisonic skin brush.)

While those companies got harvested, not a whole lot of new seeds got planted. The list of notable Seattle biotech startups this year includes Cardeas Pharma, Oncofactor, Blaze Bioscience, Aquedect Neuroscience and Cardiac Insight.

Who else made headlines in Seattle biotech in 2011? Seattle Genetics emerged. Dendreon crashed. Marina Biotech, Omeros, and AVI Biopharma all had years they’d like to forget. Cell Therapeutics somehow managed to stay in business. New leaders emerged at the global health nonprofits, as Alan Aderem moved in to run the Seattle Biomedical Research Institute, Stewart Parker took over at the Infectious Disease Research Institute, and Chris Elias created a vacancy at the top of PATH by leaving for a new gig at the Bill & Melinda Gates Foundation. The foundation’s head of global health, Tachi Yamada, left for a new venture capital gig, and was replaced by a former Novartis executive, Trevor Mundel.

Here’s a company-by-company rundown of the major events at Seattle biopharmaceutical and global health organizations we keep tabs on here at Xconomy. Tomorrow, I’ll follow up with the rundown of rundown of medical device, diagnostic, and others in fields like Bio-IT or Health IT.

Seattle Genetics (NASDAQ: SGEN). This was a transformative year for Seattle Genetics. The company broke through in August by winning FDA approval of its first product, a souped-up antibody for rare lymphomas. The drug validated a new target on the surface of cancer cells, CD30, and provided hard proof that Seattle Genetics’ proprietary chemistry can successfully link toxins to antibodies—a feat that has eluded scientists for 30 years. Big Pharma companies have beaten a path to Bothell to get licenses to the antibody-drug linking technology, and Seattle Genetics has exceeded Wall Street expectations in the early days of its drug rollout.

Dendreon (NASDAQ: DNDN). Dendreon was the star of local biotech in 2010, and this year it fell flat on its face. The company failed to live up to its first full year sales forecast with its immune-boosting drug for prostate cancer, and burned its shareholder base in the process. The company lost more than $3.5 billion in market valuation, and had to cut 500 jobs, largely because it sparked controversy and confusion by pricing its cancer drug too high—at $93,000 per patient. It remains to be seen this year whether Dendreon can pick up the pieces, as the disastrous screw-up of 2011 has created a gaping opportunity for emerging competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100.

Amgen (NASDAQ: AMGN). The Thousand Oaks, CA-based biotech company, which has significant R&D in Seattle, said at the end of the year that longtime CEO Kevin Sharer … Next Page »

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The Bill & Melinda Gates Foundation has a new boss for its multi-billion dollar global health division. Trevor Mundel, the former global head of development for Novartis, the Switzerland-based pharmaceutical giant, will start at the Seattle-based foundation on December 1, according to a statement.

Mundel will oversee the foundation’s $14.7 billion global health grant portfolio that seeks to have an impact against a variety of scourges like HIV, tuberculosis, and malaria. Mundel replaces another Big Pharma veteran, Tachi Yamada, a former head of R&D at GlaxoSmithKline who spent five years overseeing the foundation’s global health work until he stepped down in June.

“We are very pleased that Dr. Mundel has agreed to lead our global health program,” said Bill Gates, co-chair of the foundation, in a statement. “He brings tremendous scientific and medical credentials, in the lab and in the clinic. We look forward to working with him to help improve the health of people in the world’s poorest countries.”

At Novartis, Mundel oversaw some 140 clinical projects, a budget of $3 billion, and more than 7,500 employees. He is also on the boards of the Genomic Institute of the Novartis Research Foundation, and the Novartis Venture Fund, the Gates Foundation said in its statement.

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One of Seattle’s leading scientific entrepreneurs grew up in a working-class home in which neither parent went to college. Ken Stuart‘s family didn’t have enough money to send him to one of the many universities in his hometown of Boston.

When he graduated high school, he had no idea what would come next.

“I wasn’t sure I’d even go to college,” Stuart says. “I never applied. I was sick of school.”

After waiting all the way until May of his senior year, Stuart ended up talking his way into Northeastern University at the last minute and finding a co-op job to help pay the bills. Once there, he got hooked on biology. He soon got on the fast track, and could have had a tenured university faculty job, but decided early on that wasn’t enough. By combining a curiosity for some obscure fields of biology, some entrepreneurial spirit, and really good timing, Stuart ended up building a mini-global health empire at the Seattle Biomedical Research Institute.

Now at 70, after 35 years of building up Seattle Biomedical Research Institute from scratch into a research hotspot with 365 employees and a $52 million annual budget, Stuart is handing over day-to-day leadership to a successor, Alan Aderem. Stuart now says he’s looking forward to returning to more of the science that got him so fired up in the first place.

“There are very few people with the dynamic range to grow an organization from nothing to the state where Seattle Biomed is now,” says John King, a former Merck and Rosetta Inpharmatics executive who served on the institute’s board in the ’80s and ’90s. “Ken learned on the job how to be a startup guy, how to bootstrap an institute based on scientific excellence. He grew into doing things like sophisticated fundraising, marketing—all the kind of things big research institutes have to do.”

Stuart’s journey started in an unusual place. He was born in December 1940, and grew up the youngest of four sons in a working class home in Brighton, MA. His father was a house painter, and his mother was a stay-at-home mom. Stuart found himself interested in the stacks of books that his family kept at home, but he says he wasn’t much of a student. Grammar school was “incredibly easy and boring,” he says.

Stuart didn’t find much that interested him in high school science either, except for physics. It was hard to see where that might lead, though, since Stuart never really saw himself as college-bound. It all changed that one day in May of his senior year, when he recalls going to the school in person, and asking to meet with the dean of admissions. After getting an incredulous look from the secretary, who told him the fall class was full, Stuart persisted in seeing the dean. Within about 10 minutes, he had persuaded the dean to let him in, largely because Stuart had gone to a competitive public high school, he says.

This was the late ’50s, years after Watson and Crick had made the pioneering discovery of the structure of DNA, igniting the modern era of molecular biology. Looking back, Stuart says that moment was lost on him. He found biology more from his personal reading, of a number of books at home that his father accumulated. Pretty soon, Stuart found himself spending long hours not just in the libraries at Northeastern, but at Harvard and MIT libraries, which had reciprocity agreements with Stuart’s school just a few miles across the Charles River. Everything from physiology to biochemistry to frog embryo development, he gobbled up.

“I started studying intensively. I liked it,” Stuart says.

Textbooks soon weren’t enough, and Stuart says he really found his passion … Next Page »

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Tachi Yamada ran what you could call the world’s largest nonprofit venture fund for high-risk, high-reward global health ideas the past five years. Now he’s going to apply that same feel for risk and reward in the traditional venture capital business.

Yamada, 66, the former president of global health at the Bill & Melinda Gates Foundation and chairman of R&D at GlaxoSmithKline, has landed in his next full-time job as a senior executive in residence with Frazier Healthcare Ventures in Seattle. Frazier, a firm with offices in both Seattle and Menlo Park, CA, has more than $1.8 billion under management for venture capital and growth equity investments.

While at the Gates Foundation, Yamada oversaw an effort to seed hundreds of offbeat scientific projects with big potential for global health, part of the $36 billion philanthropy’s mission to fight the most common deadly diseases in the world today—including HIV, tuberculosis, and malaria. Yamada also enlisted support for the cause among Big Pharma companies that hadn’t shown a lot interest in the past. There’s probably no more than a handful of people in the world with his set of relationships in Big Pharma, and with government health ministers around the globe.

“He has a great ability to open doors, find new opportunities, help us build our existing opportunities, and get access to international markets,” says Jamie Topper, a general partner with Frazier. “I can’t say Tachi will have a dramatic shift in our strategy, but he’ll make us better investors. He has a unique set of experiences.”

Yamada will spend about 75 percent of his time working with the firm, helping to identify new investments, get the most out of existing portfolio companies, and help craft international expansion plans for the firm—especially in China and India, Topper says. Aside from Frazier, part of Yamada’s time will still be devoted to his work on the board of Japan-based Takeda Pharmaceuticals, and as a special advisor to Takeda’s CEO.

Last July in an interview with Xconomy, Yamada noted that biotech and venture firms haven’t been nearly as active as Big Pharma companies in the global health field. But he’s kept his eye on the venture business for years, partly through a part-time advisory role he has maintained since 2006 with Frazier Healthcare Ventures. Earlier this year, he oversaw the Gates Foundation’s first-ever equity investment in a biotech company—Research Triangle Park, NC-based Liquidia Technologies. The idea was, by being an equity investor instead of a project financier, the foundation could have a bigger influence over the development of a vaccine technology with broad potential against a number of diseases.

Frazier isn’t expecting that Yamada will tilt the firm’s interest toward global health, but Topper did say that global health is “incredibly important” and that Yamada will help the firm better understand how to invest in it. “I think there’s opportunity there,” Topper says. “I’m not sure we’ll invest in 15 companies in it, but some of our companies are engaging in it now.” A couple of Frazier’s portfolio companies, Topper says, have already been interacting with the Gates Foundation, and “Tachi has been instrumental in making that happen,” he says.

Yamada, in a Frazier Healthcare statement, said he’s excited to join the firm partly because it makes bets on healthcare companies “that address major health needs.” As examples, he pointed to Seattle-based Calistoga Pharmaceuticals, a cancer drug developer recently acquired by Gilead Sciences; Marcadia Biotech, a Carmel, IN-based diabetes and obesity drug developer bought by Roche; and Baltimore-based Bravo Health, a provider of Medicare Advantage health plans for seniors which was acquired by Health Spring.

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[Updated: 2:15 pm] H. Stewart Parker did some soul-searching after her dreams fizzled out at Seattle-based Targeted Genetics, but now the well-known biotech executive has found herself a big new challenge at the Infectious Disease Research Institute.

Parker, 55, the founder and longtime CEO of Targeted Genetics, has agreed to sign on as the CEO of IDRI, the nonprofit global health research center on Seattle’s First Hill. She starts on March 1.

IDRI is pretty much invisible in its hometown, but it is well-known in global health circles as a bustling center for R&D. The nonprofit, founded by immunologist Steve Reed in 1993, now has 94 employees, and an annual budget of about $25 million—half of which comes from the Bill & Melinda Gates Foundation, according to president Curt Malloy. The institute has seen about five-fold growth in the past six years, adding capabilities for vaccine research and development, low-cost diagnostics, and early-stage drug discovery—particularly a tuberculosis treatment program supported by Eli Lilly.

Reed will remain the head of R&D at IDRI, while he continues in his other work as CEO of Seattle-based Immune Design, a vaccine spinoff from IDRI and Caltech that has raised more than $50 million in venture capital. By adding Parker, IDRI is getting its first full-time CEO in the two years that have passed since interim CEO Steve Davis stepped down. Parker, with her experience at Targeted Genetics, knows all about the perils of taking promising science through the clinical development process, and all the money and collaborations it takes to support that enterprise.

“We really pride ourselves on how well we work with the for-profit sector, and she will bring a lot of experience in that area,” Malloy says. “She has product development focus, and operational expertise.” When I asked if Parker will help IDRI raise its public profile, and help improve community fundraising, Malloy didn’t answer directly, but it sounded like a yes. “We’ve kept our heads down too long, we really are a story that hasn’t been told,” Malloy says.

[Updated comment from Parker] “IDRI is the best kept secret in town,” Parker says. “This felt like a natural fit for me. I can’t wait.”

The fit was good, Parker says, because IDRI has an entrepreneurial spirit and an understanding of how things work in industry, which is rare in a nonprofit. Reed, who she has known for years since he was a co-founder of Seattle-based Corixa, personally called her to talk about the position almost a year ago, Parker says. She says she envisions working as a “co-captain” in which Reed continues to drive the R&D effort, while she focuses on key business functions like business development, strategy, fundraising, and “creating the opportunity for our scientists to excel,” she says. She adds: “Our skills are complementary.”

Since she left Targeted Genetics in November 2008, Parker took some time off to think about her next move, as I discussed in this December 2009 feature. She eventually took a part-time role with the Washington Biotechnology & Biomedical Association as a mentor for budding biotech entrepreneurs. It was a role she had unusual qualifications for, as one of the first employees at Immunex in 1981, and as the head of Targeted Genetics from the time it spun off from Immunex in 1992. Parker says she plans to step down from the WBBA role after a transition period.

Like any job, this will involve a learning curve, but it has a new wrinkle for Parker. Her past two jobs were basically with companies that were just getting started, where the culture was being created. IDRI is different in that it has an established culture which Parker will learn. This will be a little like some of her past experience as a board member, in which she has had to get up to speed on established organizations.

“I’m a good listener, I believe in teamwork, I think it will be OK,” she says.

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AVI Biopharma (NASDAQ: AVII), the Bothell, WA-based developer of RNA-targeted therapies, said today it has formed a collaboration with leading scientists at the Karolinska Institute in Sweden to find new treatments for extensively drug resistant forms of tuberculosis known as XDR-TB. Funding and research support is provided by both parties, and intellectual property resulting from the work will be jointly owned, AVI said in a statement. AVI retains an exclusive right to acquire Karolinska’s interest in intellectual property, AVI said.

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For us it would be in the area of vaccines first.

The approval of the first cancer therapeutic vaccine from Dendreon in prostate cancer establishes the concept that immunotherapy is a conceptually achievable and clinically useful approach for treating cancer. This allows us and others to develop novel concepts of immunotherapy for cancer.

On another vein is the approval of GlaxoSmithKline’s human papillomavirus (HPV) vaccine both for the continued demonstration of the importance of infectious disease-related cancer and the ability to intervene with a vaccine to prevent such a cancer. The GSK HPV vaccine also includes the first novel adjuvant in a vaccine in the U.S. in the last 30 years and thus allowing the ability of novel adjuvants to enhance immune responses for candidate cancer vaccines or vaccines that are directed at infections in the elderly.

Lastly is the discussion of the complexities that rapid emergence of resistance to cancer therapies is being increasingly noted. There is an ongoing discussion about allowing combination chemotherapy to be utilized early on in the clinical development pathway of cancer therapies as well as complex infectious diseases such as multi-drug resistant tuberculosis.

[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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Tachi Yamada was a big name in Big Pharma before he took the top global health job at the world’s richest charitable organization, the Bill & Melinda Gates Foundation. But no single organization—not even a multi-national, multi-billion dollar R&D shop at GlaxoSmithKline, or the Gates Foundation—can conquer leading killers like HIV, tuberculosis, diarrheal diseases, and malaria by itself.

The need for productive partnerships came up over and over again yesterday at an event yesterday at PATH, the nonprofit global health hothouse based in Seattle. This event brought together Yamada, Washington Gov. Chris Gregoire, Helene Gayle of CARE USA, Anne-Marie Slaughter, a high official in the U.S. State Department, and others. Most of the talk was about forming partnerships between the U.S. and other nations, between the state and federal governments, and between nonprofits like PATH, Seattle Biomedical Research Institute, the University of Washington, etc.

A number of speakers emphasized the humanitarian need to stay committed to fighting scourges of the developing world, even when state and federal budgets are tight. Yet little was said about how all the nonprofits and governments are supposed to work with Big Pharma companies like Yamada’s former employer, or for-profit venture-backed biotech companies whose job it is to turn basic research into actual vaccines, drugs, diagnostics—and get them implemented in a big way.

So I followed up with Yamada for a few minutes afterward to ask him about what Big Pharma, biotech entrepreneurs, and venture capital can do to get more involved. Here’s what he had to say.

Xconomy: What is one example of something Big Pharma has done well recently in global health, and one example of a missed opportunity?

Tachi Yamada: We consider Big Pharma to be essential partners. Ultimately new drugs and vaccines are made by Big Pharma companies, they aren’t made by the nonprofit community. So a lot of the investments we make in the discovery of new drugs, diagnostics, and vaccines really depend on private sector, for-profit companies and their full commitment to developing them. For example, the most advanced malaria vaccine candidate, in Phase III, is one that’s partnered with GlaxoSmithKline. It’s in registration trials, and we’ve invested a very significant amount of money, and they’ve matched it 50/50. We’re working together.

Tachi Yamada

Are there are other areas where things could work better, yes absolutely. But Big Pharma has stepped up, and seen the opportunity here and the responsibility. I have to say that of all the industries we deal with, they are right at the top.

X: What about venture capital and biotech entrepreneurial community?

TY: There’s been very little there, interestingly enough. One, because it’s kind of a troubled space. The old VC model for biotech has been challenged by the economic environment. We haven’t partnered as much with them, but they have partnered with some of our Grand Challenges Explorations grants. We have seen some partnership there. But I have to say that we haven’t seen much from the biotech community.

X: So who steps in to fill that vacuum? Like you say, somebody has to develop these things for global health.

TY: Basically, we serve as the VCs, and we finance virtual pharmaceutical companies with startup funds to do early stage drug discovery and development.

X: You mentioned Glaxo’s RTS,S malaria vaccine candidate. If you had to pick one program going on now that could have the biggest impact on global health five years from now, what would it be?

TY: It’s hard to say. A malaria vaccine would have a very important impact. Several TB vaccines are in early development and Phase II. They could have a big impact. We’re also working with the NIH to really push along a follow-on to the HIV vaccine trials that were promising in Thailand, along with Novartis and Sanofi-Aventis.

X: What’s the craziest idea you’ve seen in the past couple years that you think just might work?

TY: There are lots of crazy ideas. One is infrared light that keeps mosquitos away. Amazingly enough, mosquitos appear to be repelled by infrared light. We’ll see.

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Daktari Diagnostics is finding more support from both nonprofit and for-profit investors to make monitoring the health of HIV patients easy and cheap. The Cambridge, MA-based  startup has added $820,000 to its Series A round this month as it prepares to begin its first clinical trials this summer with its inexpensive technology for measuring an indicator of HIV patients’ health, company CEO Bill Rodriguez says.

The new funding boosts the firm’s first round of financing from $2.88 million to $3.7 million, which includes funding from Boston-area backers such as Hub Angels, Launchpad Venture Group, Mass Medical Angels, Norwich Ventures, Partners Innovation Fund, and individual investors. Separately, the firm has received about $600,000 from The Bill & Melinda Gates Foundation, a prominent Seattle-based nonprofits. And PATH, a global health organization based in Seattle, is funding Daktari’s first clinical trial of its diagnostic for HIV patients in Seattle this summer, Rodriguez says.

Daktari (a Swahili word for doctor) aims to fill an important gap in HIV treatment, initially in developing countries. While antiviral drugs for HIV are widely available in developing countries of Africa and Asia, patients in remote villages often lack access to labs where routine blood tests are done to gauge the strength of their immune system against the virus. So Daktari is working on an inexpensive system that can be easily used almost anywhere, without needing lab technicians to prepare blood samples with pipettes or expensive equipment as in existing tests.

Rodriguez—a physician who served as medical chief for former President Bill Clinton’s … Next Page »

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The guy whose job is to make sure the U.S. is the world’s leading humanitarian showed up yesterday in Seattle to talk to a bunch of venture capitalists and biotech entrepreneurs.

If that sounds odd, it should. But this is Seattle, home of the Bill & Melinda Gates Foundation and a cluster of hard-charging social entrepreneurs in global health, and the speaker was Rajiv Shah. He’s a 37-year-old with a medical degree, and seven years of experience at the Gates Foundation. Shah now runs the United States Agency for International Development (USAID).

With a job like that, his main concern is to get enough food and water into a disaster zone like Haiti. But at the Life Science Innovation Northwest conference, he gave a luncheon keynote talk in which he insisted he wants to use some of the money (a $54 billion budget request in fiscal 2010) and manpower (staff of 8,000) at his command to form the kind of public-private partnerships that his former employer thinks provide the focus needed to get new drugs, diagnostics, and vaccines out in the field and actually helping people in poor countries.

It sounds good, but as anyone who has applied for a federal grant knows all too well, there’s more than a little red tape involved when public meets private. And, USAID isn’t exactly the first agency on the mind of the average biotechie looking for research support for an intriguing idea—that would be either the National Institutes of Health, the Small Business Administration, or Department of Defense. While Shah is obviously a smart, able, and ambitious guy, count me a skeptic: I’ll be shocked if USAID has any meaningful partnerships with any Northwest biotech companies one year from now.

Still, I figured there may be some people in the local biotech community who might be able to visualize a fruitful relationship with USAID. So I sat down with Shah for a few minutes after his talk to get a sense for how he’s approaching the job. Here are edited excerpts.

Xconomy: When I think of USAID, I think of people who provide food and water to disadvantaged parts of the world after a disaster. When I think of agencies that do work to stimulate life sciences R&D, it’s NIH and DoD. So what exactly can USAID do to bring forward new drugs, diagnostics, and vaccines?

Rajiv Shah: The answer is a lot. We make a significant amount of direct investment in research and product development. But I think we have some unique capabilities that could be even more effectively explored. We buy a lot of health commodities for low-income communities and low-income countries. They range from contraceptive commodities to malaria drugs to vaccines for children. That significant purchasing power could be used to create financial incentives for more technology development. We could work more effectively with other countries on the introduction of new technologies in a way that’s consistent with building strong, sustainable health systems. And we could build on our really rich record of identifying and developing those technologies that are uniquely appropriate for low-income settings where we might work in sub-Saharan Africa, or South Asia. Things that are affordable, easy to administer, and are heat-stable and not require a cold chain.

X: You mentioned in your talk that the President has a $63 billion, six-year program to stimulate global health innovation, but how much of that is within USAID, and how much purchasing power do you have?

RS: That figure represents the whole U.S. government’s global health work, which is primarily USAID, but also includes the President’s … Next Page »

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This week I spoke with veteran biotech executive Una Ryan at her office about her strategy for raising money to advance the cause at the Harvard spinout Diagnostics For All. So it was no surprise to spot her just a few hours later at the McGovern Institute for Brain Research at MIT, networking with accomplished academics and powerful industry types.

Ryan, who began work as CEO of the nonprofit diagnostics firm in early January, needs to network to execute her plan to begin providing its paper-based diagnostic tests to patients in poor countries by the end of this year, because it’s going to require a lotmore money than the two-year-old firm has in the bank today. The good news is that the firm’s co-founder, renowned chemist George Whitesides, along with his collaborators, have finished much of the engineering required to manufacture the nonprofit’s postage stamp-sized devices cheaply and easily. (The nonprofit also gained early acclaim for being a 2008 winner in the prestigious MIT $100K Entrepreneurship Competition.)

Despite the low cost of the technology, it’s going to cost between $2 million and $5 million to begin providing the firm’s diagnostics to the developing world, in part because its products will need additional testing and operational support. It’s an urgent matter, too, since the firm’s tests could catch signs of lethal liver damage in hundreds of thousands of HIV/AIDS patients in poor countries whose medications can have undiagnosed side effects. There are also opportunities to expand use of the technology for patients with diseases such as tuberculosis, malaria, and diabetes.

Therefore, Ryan is leading a multi-pronged effort to raise money at the firm; there is a link on its website where people can make donations online. “It worked for … Next Page »

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Great technology improvements over the past decade have proven again that innovation serves as the best currency for progress against our greatest challenges. Terrific new tools and applications in information technology have been on display everywhere during the holidays; green tech ideas abound offering great promise; and even in the more prolonged R&D world of biopharma, we have seen important advancements across a wide variety of diseases. Other better-versed contributors undoubtedly will expand on specific achievements, and what is in the pipeline for the exciting decade ahead.

All these areas of technological innovation are unified by the challenges and opportunities arising from their underlying intellectual property framework. With the “innovation economy” serving as the future driver of our economic well-being, and technological solutions central in finding solutions in energy, health, communications and more, IP has become the critical rudder for the 21st century economy. Alongside our focus on the specific innovations that we will see in the coming decade, we need to more transparently and aggressively understand, expand, address and deploy IP models and methods.

IP unfortunately still remains primarily in the domain of lawyers, innovators and funders, often misunderstood, abused or ignored by the general public, sales channels or policy-makers. Over the past 30 years we have witnessed a remarkable change in the amount of professional attention toward the field: law schools across the country now offering specialized IP programs; thousands of dedicated IP legal and consultancy firms around the world; many new laws, policies, cases, books and articles on the topic; and a modest recognition by the general public that that such rights exist based on the IP noise made in the online media world.

We now must build on those advancements to more effectively educate broadly what intellectual property means to both individuals and our society. We now must address some of the toughest great debates troubling the field (and the related technologies), such as the fundamental conflicts over online content, the appropriate role of IP protection in the context of global health and development, or the rights and obligations that arise from supra-sovereign technology solutions arising in energy and climate change. We now must also be more creative in using IP as a tool for further progress, innovation and positive social change, instead of primarily a defensive sword for protection of vested interests.

Some of the world’s biggest challenges will only be solved by more creative thinking in this regard. For instance, we will meet the challenges of climate change not only through massive policy shifts, but through technology innovations in which we must both reward the innovator and ensure the innovations are shared broadly, quickly and effectively, often across national borders. Reliance only on markets and existing IP infrastructures will not be adequate to meet these demands. Similarly, as we address some of the world’s most troubling global health challenges – whether pandemic flu outbreaks, malaria or TB vaccines, or innovations in therapeutics or diagnostics – engaging more private sector players on terms that both allow for their most aggressive participation and yet ensure the global access to the discoveries for the world’s poor, will force us to engage in new and better ways to manage the rights and obligations arising from these innovations. The same might be said for more still-forming world of online and social media, where the rules of the road are so dynamic that the law is simply not keeping pace with the technologies.

How all this will play out in the coming decades remains unclear. But I would place a big bet that at least as much attention, debate, and opportunity for change and innovation exist in how we think about and manage ownership and distribution of technology, as in the technologies themselves. As we commence the second decade of the 21st century, more attention, analysis and education should be paid to this defining characteristic of our times.

[Editor's Note: This is part of a series of posts from Xconomists and other technology leaders from around the country who are weighing in with the top innovations they've seen in their respective fields the past 10 years, or the top disruptive technologies that will impact the next decade.]

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When somebody gets a fever in a poor country, there is no quick or easy way to tell whether it’s a symptom of flu, malaria, a bacterial invader, or some other bug.

And if you don’t what it is, then it’s hard to treat.

So it’s only natural that shrinking modern diagnostic tools into a lightweight box that’s fast, accurate, cheap, and rugged enough for the African bush is one of the big ideas the Bill & Melinda Gates Foundation has supported in the past five years. The instrument is now starting to take shape under the direction of a team at the University of Washington, through what’s called the DxBox, which looks a little like the popular video game console with a similar name. And this particular box is entering a delicate phase in which big decisions are being made about whether it is really ready for a prime time commercial push, in which it could help healthcare workers better diagnose millions of people.

The original Gates grant, worth $15.4 million over five years, went to a diverse collaboration between a pair of bioengineering labs at the University of Washington, global health experts at Seattle-based PATH, and a couple of commercial partners in Redmond, WA-based Micronics and what used to be called Bothell, WA-based Nanogen (now part of ELITech Group). Four years have now passed by since the first check arrived. As the lead scientist on the project, UW bioengineering chair Paul Yager, put it in a recent UW symposium, “it’s put up or shut up time.”

What he really meant is that enough work has been done that it’s time to size up the real-world commercial potential of the product, or maybe spend some more time back at the drawing board. “You have to take what’s in a lab here in Seattle and scrunch it down to that,” Yager said, pointing to a prototype sitting on a shelf in his office, when I followed up recently. “It’s probably about two years away.”

DxBox

So after all of the long hours from 40 UW graduate students and postdocs, another 60 professionals outside the UW, and a lot of trial and error to meet all the demanding requirements of a portable diagnostic, what can this DxBox really do?

It is made to take a pinprick of blood, which a health worker squeezes onto a cartridge that slides into an 8-pound prototype device. All the health worker needs to do is hit “run,” and the pumps and valves inside the little box perform two kinds of automatic diagnostic tests. One is an immunoassay test that uses conventional antibodies, not all that different from a pregnancy test, that are made to bind with certain microbial invaders or antibodies that people produce in response to a certain infection. The other test is a more precise nucleic acid assay, which is supposed to identify microbes at the DNA level. Both tests are made to spit out an answer on an LCD screen in whatever the worker’s native language is, within 30 minutes, to identify the patient’s illness, Yager says. And the machine can run a full day on a laptop battery in places without electricity, Yager says.

The DxBox was designed to screen for six common illnesses that are associated with high fevers—flu, malaria, typhoid, rickettsial infections, measles, and dengue. Even from the start, the machine wasn’t made to be comprehensive, since it doesn’t screen for two of the biggest killers … Next Page »

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The Seattle-based Infectious Disease Research Institute, a nonprofit global health research center, said today it has agreed to license technology from Israel-based NanoPass to use very short “microneedles” that cause less pain than traditional needles. The technology is supposed to stimulate the dense network of immune system cells just under the surface of the skin, which might make a number of new vaccines more protective, IDRI said in a statement. Financial terms of the agreement weren’t disclosed.

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We had a smorgasbord of life sciences news this week, featuring updates on Northwest companies developing drugs, devices, vaccines, and scientific instruments.

—Cell Therapeutics has bet the company on pixantrone for non-Hodgkin’s lymphoma, and this week it hit one of its key goals for the year, by turning in its new drug application to the FDA before the end of June. The Seattle company (NASDAQ: CTIC) fell short in its bid to unload all of its $118.9 million in debt, instead getting rid of about $52.9 million of its liabilities.

—Seattle-based Targeted Genetics (NASDAQ: TGEN) has been in survival mode for some time now, and this week it said it will cut its staff down to as little as 10 to 15 employees. The company hopes the cuts will stretch its cash reserves into August, giving it enough time to close a deal to keep the company from closing its doors.

—Sanofi-Aventis CEO Chris Viehbacher traveled to Seattle last week for a global health meeting, and took time to offer a glimpse into his strategy to make the Paris-based drugmaker a bigger player in global health. He also shared his perspective on partnerships with biotech companies.

—Seattle-based Amnis shared its story of how it has rolled out a second-generation version of its sophisticated lab instrument, which combines properties of a microscope with a high-speed cell counter called a flow cytometer. Orders are building up, and this could be the company’s first full year of profitability after a decade in business, says CEO David Basiji.

—Oncothyreon (NASDAQ: ONTY), the Seattle-based developer of cancer drugs, said that its German partner, Merck KGaA, started up a pivotal trial of its immune-boosting therapy, Stimuvax. It’s the second big trial of this drug, which is already being tested against lung cancer. If it’s successful, Oncothyreon will stand to get royalties on product sales.

—AVI Biopharma (NASDAQ: AVII), the Portland, OR-based developer of RNA-based therapies, said it is working on a contract to develop swine flu drugs.

—Bothell, WA-based Mirabilis Medica told its story about how it is developing the first use of high-intensity therapeutic ultrasound waves to treat uterine fibroids, as a non-invasive alternative to surgery.

—MDRNA (NASDAQ: MRNA), the Bothell, WA-based developer of RNA interference drugs, gained full rights to a technology license from Denmark-based RiboTask to make its treatments more stable, and less likely to spark inflammation.

—Global health funding has quadrupled over the past two decades, and while a lot of this new money comes from foundations like the Bill & Melinda Gates Foundation, the biggest financier of this work is now the U.S. taxpayer, according to this intriguing new study from the University of Washington.

—Anthony Fauci, the head of the division of the National Institute of Allergy and Infectious Diseases, called for a transformative research agenda to fight tuberculosis, like the country did for HIV in the 1980s, during a stop last week at the Pacific Health Summit in Seattle.

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Not long ago, drug companies would break out quarterly income streams from the U.S., Europe, Japan, and something called ROW, as in rest-of-world. Investors usually didn’t care about the last numbers, because they were little more than a rounding error.

That’s not the case anymore, as these countries are often called “emerging markets.” They’ve grown enough that Chris Viehbacher, CEO of one of the world’s largest drug companies, Paris-based Sanofi-Aventis (NYSE: SNY), traveled to Seattle this week to curry favor with global health officials at the Pacific Health Summit. The head of a major drug company might have gotten a cold shoulder at a meeting like this a decade ago, but these officials welcomed Viehbacher. Sanofi made headlines at the summit, as it said it plans to donate as many as 100 million doses of flu vaccine to the World Health Organization to help poor countries cope with the swine flu pandemic.

This could all be written off as some kind of public relations exercise, but I wondered if there’s more to the story. The pharmaceutical industry is terrified by a series of patent expirations coming over the next few years, which will allow a flood of cheap generic copies to grab market share away from franchise products that generate an estimated $67 billion in annual sales. Not much has emerged in the industry’s R&D pipeline to replace all these aging blockbusters. Some analysts predict pharma companies will have to continue acquiring and partnering with innovative biotech companies to sustain themselves.

Sanofi has made a couple aggressive moves like this since Viehbacher took over Sanofi in December. Earlier this year, it acquired cancer drugmaker BiPar Sciences for $500 million (giving BiPar investor Paul Allen a big payday), and partnering with South San Francisco-based cancer drug developer Exelixis for a deal possibly worth more than $1 billion.

But Viehbacher also has his sights on making money on low profit-margin, high-volume products in parts of the world that are off the pharma industry’s beaten track. It’s part of a strategy to make Sanofi a more globally diversified company, rather than placing all its chips on the U.S. and Europe—where governments are looking for ways to trim healthcare spending.

Here are edited highlights of a wide-ranging conversation we had about industry trends, the reasons for donating flu vaccine, and how he likes to deal with biotechs.

Xconomy: Why come here to the Pacific Health Summit?

Chris Viehbacher: I laid out a strategy for the company in February, to become a global healthcare company, versus a pharmaceutical company focused on the U.S. and Europe. That means we want to be present in all countries, and therefore, you have to address all diseases in all countries. You can’t just take medicines doing well in the U.S., and try to find people rich enough in other countries to buy them. So, the company is hugely committed to these huge global health issues. We probably, I think, do more than just about anybody. We are very significant in malaria. We are the only company doing things for Sleeping Sickness. We have a new antibiotic coming for tuberculosis, which could cut the treatment time down to four months [from six months], which is huge in the area of TB. We are spending huge amounts of money developing a Dengue Fever vaccine and developing facilities for it. We have partnered with a lot of people in that room, whether it’s the Gates Foundation, GAVI[Global Alliance for Vaccines and Immunization], the Global Fund to Fight AIDS, Tuberculosis, and Malaria. Those are all people we try to work with on a regular basis. It’s very much in line with our strategy. I take a personal interest in these global health issues, and it’s good to meet folks.

X: To what extent does the donation of flu vaccine amplify the company’s global health effort, or show that you’re serious?

CV: The pandemic flu donation is exceptional. I’d normally say donations are not the way to deal with issues of access to medicine. It’s not sustainable. If we were dealing with malaria, or tuberculosis, then I wouldn’t … Next Page »

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Many people thought tuberculosis had gone away. Unfortunately, it has not. Indeed, it is coming back strongly, and in a multidrug resistant form. This has occurred at a time of a vacuum in drug discovery and development for tuberculosis.

Fortunately, government institutions like the National Institutes of Health, non-governmental agencies like the Seattle Biomedical Research Institute, PATH, and even pharmaceutical companies are investing in tuberculosis research.

Interestingly, pharmaceutical companies are doing this for the public good, as it is unlikely that this research could ever be turned into a profitable business for them. Nonprofit organizations like the Global Alliance for TB Drug Development are clinically testing new and more convenient treatments for patients.

Encouragingly, at the Pacific Health Summit, the Global Alliance and Johnson & Johnson’s Tibotec subsidiary announced a novel partnership devoted to the development of an innovative new drug for both drug-sensitive and drug-resistant TB [See Xconomy's earlier coverage].

Much of this work in research and development is being shepherded and supported by the Bill & Melinda Gates Foundation. Scientists follow the money. If the money flows in to support TB, so too will high-quality scientists.

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[Updated: 7:05 pm Eastern]

Wealthy donors like the Bill & Melinda Gates Foundation have helped spark a movement that has almost quadrupled financial support for global health in the past two decades, yet much of the world’s financial support is being spread unevenly, and isn’t always getting to the poorest people in the neediest countries, according to a new study by researchers at the University of Washington and Harvard University.

It might sound surprising, but the people who produced this edgy piece of research, which claims to be the first ever comprehensive look at funding for global health projects, are sponsored by the Gates Foundation. The study, being published in The Lancet, is co-authored by Christopher Murray and six colleagues, including Catherine Michaud of the Harvard Initiative for Global Health. Murray is the former Harvard University professor recruited to the UW two years ago with a $105 million donation by the Gates Foundation to establish the Institute for Health Metrics and Evaluation (IHME).

The report—written without input from the Gates Foundation—is loaded with financial detail, which will certainly be required reading for those who argue that powerful private donors aren’t being transparent enough about what they do. The report found that financial support for global health has climbed from $5.6 billion in 1990 to about $21.8 billion in 2007. This field that attempts to reduce health disparities around the world, used to be primarily the responsibility of international organizations like the World Bank and the United Nations, but now gets almost one-third of its total funding from private sources, according to the study.

Yet even as all this money has flowed in for help, 12 of the 30 countries with the highest burden of disease in the world weren’t getting as much aid as people in healthier, and in some cases, wealthier, countries, according to the study. Angola, Ukraine, and Thailand were among the neediest countries that haven’t been getting their share of health aid.

“The size and scale of it all was surprising,” Murray says. “We all knew the money was going up, but it was much a bigger increase than we thought we’d see. ”

Since no one organization has done a comprehensive analysis of how much money is going to global health, which countries get the money, and which disease categories receive the most, the findings are likely to spark a lot of conversation in global health circles about how to better allocate resources.

“Everyone’s watching,” Murray says.

Some small island nations like Micronesia and the Solomon Islands receive more health aid per capita than countries with higher rates of illness—like Niger and Burkina Faso, according to the study. Mali and Colombia have about the same level of sickness, yet Colombia receives triple the health funding, researchers said. Researchers said they don’t know exactly why that is, although many of the countries with great health needs, and that lack support, are French-speaking former colonies in central and western Africa, Murray says. … Next Page »

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Anthony Fauci is known around the world as a leading scientist and advocate, starting in the early 1980s, for research to fight HIV. The Voice of America once called him a “tireless warrior” for the cause. Now, Fauci says, biologists need to channel their creative energy to fight another deadly bug that has been around for centuries and rarely makes headlines—tuberculosis.

Fauci, 68, has been the director of the National Institute of Allergy and Infectious Diseases since 1984. This division of the U.S. government has a $4.7 billion annual biomedical research budget, which happens to be a lot more than the Bill & Melinda Gates Foundation gives away every year. So people listen carefully to what Fauci has to say. He delivered a high-intensity call to action yesterday to a crowd of 250 global health stars at the Pacific Health Summit, and I followed up with him for an exclusive interview.

First, a quick reminder of why anyone should pay attention to TB. It’s a contagious bacterial infection, and kills an estimated 1.7 million people a year worldwide, ranking it right up there with the world’s biggest scourges, like HIV and malaria. Yet it’s basically been treated like a research backwater for too long, Fauci says. The state of the art is depressing. There’s no vaccine. Diagnostics are lousy. The standard course of therapy—which has seen no improvement in 40 years—involves four drugs that must be taken daily for six months. Fail to comply fully with doctor’s orders, and you increase the odds of developing drug resistance, making it harder to treat.

Incrementalism in this field won’t cut it—a bigger transformation of TB is required to get serious about the disease, Fauci says. Here are the edited highlights of our conversation:

Xconomy: Why has TB been on the back burner of research priorities for so long?

Anthony Fauci: When you think about how basic and applied research drive a particular field, a lot of it has to do with the interest and energy of investigators who get involved in the field. They see it as an opportunity for them to make a contribution, as well as to advance their own careers.

TB has suffered a lot because of its own success historically. There were some blips when TB rebounded in the mid-80s and early 90s, and most recently with the serious issue of multidrug resistant TB and extensively drug resistant TB that has sort of rekindled interest. But most young investigators have not seen, with some exceptions, a career in research of TB as something to pursue. A lot of the transformational research from the past few decades, from the end of the 20th century and early 21st century, in the arena of systems biology, genomics, and all the other -omics fields, and all sorts of host-pathogen interaction study, has really passed by TB research.

The point I made in my talk is we’re starting to see a rekindling of some effort. We are really going to have a research agenda, and have research play a role in what is a very broad, heterogeneous, comprehensive approach to TB control, of which research is only one element. We have, in our possession, many of the tools if properly implemented, that could go a long way to control TB, including MDR and XDR TB. But we don’t have … Next Page »

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Center stage in Seattle life sciences moved to the waterfront this week, as 250 global movers and shakers in science, global health, and the pharmaceutical business gathered for the Pacific Health Summit.

—The Pacific Health Summit, an invitation-only event of global health stars, in its fifth year, focused this year on multidrug resistant tuberculosis, as I wrote in this preview story. Big names from global health came to brainstorm, including Margaret Chan of the World Health Organization, Anthony Fauci of the National Institutes of Health, and Chris Viehbacher, the CEO of Sanofi-Aventis, the world’s largest vaccine maker. Seattle’s Infectious Disease Research Institute is one of the players in this field, too, through work supported by Eli Lilly.

—Every good conference like the Pacific Health Summit needs power players competing for media attention. This year, we had two pieces of international news. Johnson & Johnson announced a deal to co-develop a new drug with the nonprofit TB Alliance; the deal could lead to the first new drug against tuberculosis in more than 40 years. Sanofi-Aventis also broke some news by announcing it will donate 100 million doses of flu vaccine to the WHO, to help poor countries cope with the swine flu pandemic.

—I profiled Beat Biotherapeutics, a Bellevue, WA-based company that envisions a way of generating stem cells that could perform the function of a cardiac pacemaker, or maybe someday even regenerate heart muscle that’s been damaged by heart attack. This company is built on years of research by UW stem cell scientists Chuck Murry and Michael Laflamme, and is married to bioengineering techniques from Buddy Ratner’s lab at the UW.

—Mukilteo, WA-based CombiMatrix (NASDAQ: CBMX) never captured much of the market for sophisticated gene chips used in modern biotech labs, which is now dominated by Santa Clara, CA-based Affymetrix and San Diego-based Illumina. But now CombiMatrix hopes to carve out an emerging niche by marketing its DNA microarray instruments as a diagnostics service to physicians, who are looking for accurate ways to diagnose the aggressiveness of an individual patient’s form of cancer, and to use genetic screening to catch malignancies earlier.

—MDRNA (NASDAQ: MRNA), the Bothell, WA-based developer of RNA interference drugs, has been working hard to clean up its balance sheet the last few months. It faced a cash crisis earlier in the year, and then raised $7.25 million from Novartis, another $10.5 million from investors, and used some of the proceeds this week to pay off its $5.5 million debt to GE Capital.

—Seattle’s Infectious Disease Research Institute said it is offering up its immune-stimulating compounds known as adjuvants to the world’s major vaccine makers. With the right partnerships in place, these adjuvants have potential to greatly amplify the world’s supply of flu vaccine, says IDRI founder Steve Reed. This may come in especially handy if the swine flu pandemic takes a severe turn for the worse.

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