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

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

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

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

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

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

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PATH president and CEO Chris Elias, who led the global health nonprofit to prominence over the past decade, is stepping down to become the president of global development at the Bill & Melinda Gates Foundation.

Elias joined PATH in 2000, when it had an annual budget of $44 million and a staff of 297 employees, according to a statement today from the Seattle-based global health nonprofit. PATH now has an annual budget of $295 million and more than 1,100 employees around the world, the nonprofit organization says.

PATH, as I described in it a February 2009 feature, essentially seeks out clever, affordable technologies, and partnerships with companies to help improve the health of have-nots around the world. The organization has grown rapidly in parallel with the Gates Foundation over the past decade, and it has received more than $1.3 billion from the foundation in its history for efforts to develop low-cost health interventions with big potential impact, like a malaria vaccine.

“Developing and delivering global health solutions with my colleagues at PATH has been an honor and a privilege. It isn’t easy to leave such a talented and committed team. But I leave knowing that PATH is an exceptionally strong organization with an even brighter future ahead,” Elias said in a statement. “I look forward to watching PATH continue to innovate and improve the lives of people around the world.”

In his new job, Elias will help lead the Gates Foundation’s efforts to fight poverty in developing countries. He will stay at PATH through January. PATH chair Molly Joel Coye will lead a board committee that will search for Elias’ successor, PATH said in a statement.

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It’s rare to see an entrepreneur cheering for a direct rival, but that’s exactly what’s been happening over the last week or so in New York. It started on October 18, when shares of Boston-based Agenus (NASDAQ: AGEN) jumped 65 percent to $4.43 on news that a GlaxoSmithKline (NYSE: GSK) malaria vaccine containing an ingredient that Agenus supplies performed well in a clinical trial in African children. That ingredient, called QS-21, is a chemical extracted from the soap bark tree, an evergreen native to Chile.

So who was cheering? That would be Jeffrey Gardner, CEO and co-founder of Adjuvance Technologies, an NYC startup that’s developing synthetic versions of QS-21, as alternatives to the sometimes scarce natural version that Agenus markets. The Glaxo/Agenus vaccine, he says, “is a good opportunity to prove QS-21 works. Would I prefer that Glaxo license QS-21 from us? Absolutely. But this is pivotal. It will prove the efficacy of QS-21 not just in humans, but in really young humans.”

Agenus’ stock has since settled back down to $2.71, but over a sushi lunch in Manhattan yesterday, Gardner’s enthusiasm for QS-21 was anything but muted. QS-21 is what’s known as an “adjuvant”—a substance that boosts the body’s immune response to a vaccine. The only adjuvants that have been approved by the FDA are aluminum salts or gels, and vaccine makers such as Glaxo have long been on the hunt for alternatives. About 15 drugs and vaccines containing Agenus’ QS-21 are currently in late-stage clinical trials. “People in pharma love QS-21, but it’s rare and not always easy to get,” says Gardner (pictured above). “That’s where we can add the most value.”

Adjuvance Technologies was born out of necessity at Memorial Sloan-Kettering Cancer center in New York. Co-founder Philip Livingston, an attending physician at the hospital, was looking for adjuvants that would work in the cancer vaccines he was developing. “He tested literally everything under the sun,” says Gardner, himself a scientist who … Next Page »

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Two Boston-area startups—both of which emanated from the lab of MIT bioengineer and entrepreneur Bob Langer—announced today that they secured $25 million a piece in funding from Rusnano, a $10 billion Russian Federation fund that supports nanotechnology startups. The money went to Watertown, MA-based Selecta Biosciences and Cambridge, MA-based BIND Biosciences. Each company also added $22.25 million from current and new investors. Total it all up and it’s a huge haul: $94.5 million in the two companies combined.

Rusnano was founded in March of this year and is owned by the Government of the Russian Federation. The organization’s mission is to co-invest in nanotech projects that it believes will offer substantial economic and social benefits to Russia. As part of the deal, BIND and Selecta will each establish subsidiaries in Moscow. “They’ll be able to leverage the scientific and technical expertise, the clinical resources, and even the manufacturing resources in Russia,” says Noubar Afeyan, CEO of Flagship Ventures, which was a founding investor in both BIND and Selecta. “We see it as a multi-pronged opportunity.”

The seeds for the Rusnano deal were planted about three years ago, when Afeyan met some of the professionals who would ultimately come to manage the Russian fund. At the time, Afeyan says, he was serving on the board of the Skolkovo School of Management in Moscow. He arranged for his Russian contacts to tour Langer’s lab at MIT, as well as other institutions working on nanotechnology. “They were impressed with the potential of nano-medicine, especially in cancer,” Afeyan says.

The nanotechnology at the heart of this deal originated at labs directed by Langer and by Omid Farokhzad, a professor at Harvard Medical School. BIND and Selecta are pursuing different applications for the invention—nanoparticles that can hone in on specific targets in the human body and deliver drugs to them without … Next Page »

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The best thing about coming to the BIO Investor Forum in San Francisco every year is the schmoozing with folks from all over the country in one place. The worst thing? There’s not much in the way of breaking news.

Oh well, sometimes you gotta do the spade work on a slow news day if you want to be ready on a big news day. This is one of those times. The BIO Investor Forum attracts an odd mix of some little companies hardly anybody has heard of, some promising startups, a few public companies I would like to forget, and a decent smattering of investors and business development types all trying to figure out the next shrewd thing to buy.

While there might not have been much earth-shattering news from BIO Investor Forum yesterday, I did sit in on a few sessions with companies from around Xconomy’s 6-city network. Here are some of the highlights from a few companies that I monitored in and around the conference.

—Immune Design, a vaccine developer in Seattle, let it be known in the vaguest terms that it has formed a new research collaboration with Sanofi to study one of its existing compounds as a treatment for allergies. That is a bit of news, although CEO Carlos Paya emphasized a research collaboration, which I took as one way of saying “not much money.”

Still, Immune Design attracted a small but pretty engaged audience at this conference. The company has raised $50 million from ProQuest Investments, Alta Partners, The Column Group, and Versant Ventures. It has one partnership with MedImmune to supply it with a vaccine-boosting compound known as an adjuvant. MedImmune obtained the right to use the adjuvant in experimental vaccines for respiratory syncytial virus (RSV), Epstein-Barr virus, and cytomegalovirus (CMV) infections

The adjuvants that Immune Design is developing are synthetic compounds that are supposed to be 10-100 times more potent than the natural-product derived MPL adjuvant that GlaxoSmithKline currently uses to amp up its human papillomavirus vaccine (Cervarix), Paya says. Immune Design co-founder Steve Reed and his team at Seattle-based Corixa developed the earlier-generation adjuvant, and now have set out at the new company to create adjuvants that improve on the old ones. Namely, the new adjuvant is supposed to be cheaper, more reproducible, and easier to manufacture at commercial scale.

The new compound is supposed to specifically stimulate a target known as the TLR4 receptor, which sets off an immune reaction that the company thinks could be useful in different settings for triggering an immune reaction against herpes simplex-2 infections—the cause of genital herpes—and cancer.

“This one (GLA) is a synthetic molecule that offers straightforward manufacturing, and stability,” Paya said in his presentation.

Immune Design has run a variety of early clinical trials that have exposed about 300 patients to the new synthetic adjuvant, Paya said.

—Sunnyvale, CA-based Sorbent Therapeutics provided a few more bits of information beyond what I reported in a feature in these pages last July. Sorbent made news earlier … Next Page »

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Chronically bad unemployment is the biggest story in the U.S. today, and we had some more bad news about jobs being lost this week in Seattle biotech. But there were a few other good things to report, including a story about a new company being born.

—Amgen (NASDAQ: AMGN), the Thousand Oaks, CA-based biotech giant, said this week it is cutting 380 jobs companywide from its R&D operations, which includes 70 people at its sites in Seattle and Bothell, WA. The company plans to say more about the cutbacks Monday on its quarterly financial conference call.

—GlaxoSmithKline made big news in Seattle this week at the Bill & Melinda Gates Foundation‘s malaria forum. The story was about how GSK’s experimental malaria vaccine, supported by the Gates Foundation through the PATH Malaria Vaccine Initiative, was found to protect about half of African children in a Phase III clinical trial. But there’s an elephant in the room about vaccine cost that nobody is really discussing thoroughly in public.

—The latest biotech startup in town has officially spun out of the Fred Hutchinson Cancer Research Center. The company, called Blaze Bioscience, has raised its first $725,000 in angel financing and recruited former ZymoGenetics dealmaker Heather Franklin as its CEO. The idea, from the lab of researcher Jim Olson, is to “paint” tumors so that surgeons can make sure they get rid of the whole tumor, and not leave behind straggler cells that can lead to a recurrence.

—I’ve had Immunex on the mind lately as we prep for our next big Xconomy life sciences event, “The Immunex Impact“ on Dec. 1 in Seattle. Yesterday, I invited Immunoids to bring some old photos and company memorabilia to the event. I also announced the newest addition to the lineup of speakers—Patricia Beckmann. She will join Steve Gillis, Chris Henney, Doug Williams, Stewart Parker and others in this special confab of Immunex alumni. And speaking of Henney, he was honored this week with a biotech “Hall of Fame” award at an annual industry event in Laguna Niguel, CA.

—Bothell, WA-based Marina Biotech (NASDAQ: MRNA) has been running low on cash lately, but it found some support this week from a single investor who agreed to put as much as $15 million into the company over time.

—From the medical device side of town, we had a couple stories about companies going in opposite directions. Kirkland, WA-based Pathway Medical Technologies, acquired in August by Bayer’s Medrad unit, has allowed a lease extension option to expire on its headquarters, suggesting that it may not be interested in keeping operations in Seattle. On a more positive note, Redmond, WA-based Mobisante talked about how it has received more than 300 sales leads for its ultrasound-on-a-smartphone, even before it’s really ready to capture much of the market for this low-cost diagnostic tool.

—I know people have heard a lot of song and dance about genomics revolutionizing healthcare, and the reports have been greatly exaggerated to date. But in this week’s BioBeat I took a moment to marvel at the truly amazing kinds of experiments that are now feasible as scientists have learned how to sequence entire human genomes for $4,000 or less, in a matter of weeks. I’m going to explore this further next Monday at our next event in San Francisco, “Computing in the Age of the $1,000 Genome.”

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The buzz at the Bill & Melinda Gates Foundation’s malaria conference yesterday was all about clinical trial results from a new vaccine the foundation developed with pharma giant GlaxoSmithKline. But there’s a big question about how much this vaccine will cost, and nobody is willing to offer specifics about that yet.

To recap, here’s what got people excited. The vaccine, known as “RTS,S,” showed it protected about half of African children aged 5-17 months from getting the disease, with minimal safety problems or side effects, according to findings published in the New England Journal of Medicine. The analysis was done on about 6,000 children, who were followed for 12 months after being vaccinated. The data, from the third and final phase of clinical trials, essentially confirmed what scientists saw in more preliminary studies. The full trial is expected to run through 2013, and once a 30-month follow-up analysis is complete, the hope is that the vaccine could be made available for sale in Africa in 2015, says Christian Loucq, the director of the PATH Malaria Vaccine Initiative, a Gates-funded initiative that is co-developing the vaccine with Glaxo.

It’s clearly a bit of good news for the field of malaria. The disease, which was wiped out thanks to the widespread use of the insecticide DDT in many parts of the world in the mid-20th century, made a roaring comeback as the malaria parasites evolved, killing as many as 1 million people a year worldwide by the early 2000s. The death toll has dropped in recent years by about 20 percent, to an estimated 781,000 in 2009, according to World Health Organization (WHO) statistics cited in an AFP story.

No one has ever successfully developed a vaccine against this infectious disease, and the ability to disseminate one will depend heavily on price. Glaxo CEO Andrew Witty repeated yesterday that the company plans to sell the vaccine at the same cost it takes to manufacture the product, plus a 5 percent markup, which will be plowed back into development of next-generation vaccines for malaria and other bugs. Bill Gates himself, in a keynote, commended the company for its commitment to a “low-cost” vaccine. But exactly how much it will cost to produce such a vaccine for some of the world’s poorest people, and will it be priced low enough so that it can really reach the tens of millions of children who need it?

Melinda Gates, center, at blogger roundtable in Seattle. Gates Foundation program officer Jessica Milman, right.

That’s where things get more vague, and more sensitive. I posed the question to Melinda Gates yesterday in a briefing with bloggers, and she deflected it to an aide sitting next to her—Jessica Milman, a senior program officer at the Gates Foundation. Here’s the exchange:

Xconomy: We heard Bill mention this morning that GlaxoSmithKline is committed to a low cost for the RTS,S vaccine. How low is low? And what is a good price for a vaccine that is 50 percent protective?

Jessica Milman: All we can really go on is what Andrew Witty has been saying. He has said cost will not be a barrier for people who need it most. And he has been on the record multiple times saying it will be the cost of manufacturing plus a 5 percent margin, all of which he plans to put back into research for neglected diseases.

X: But where would you like to see the price at, so it can reach the broadest number of people?

JM: The issue of cost has to be built into the efficacy, and the coverage that we think we’ll be able to achieve. Right now, everything is in motion, as we collect the rest of the data and we get a better sense of what will be the most appropriate cost.

Followers of the pharma industry know quite well how hard it is for any company to make a commitment like Witty’s. The malaria vaccine effort so far has cost $300 million over the past decade, and GlaxoSmithKline estimates it will have to invest another $100 million to $150 million to complete the project. The company is developing capacity to make 30 million doses of the vaccine at a factory in Belgium now, three to four years before the vaccine might be widely available, so that it can meet the demand it anticipates based on the current rate of effectiveness. It’s possible the company may need to boost … Next Page »

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Today European drug giant GlaxoSmithKline (NYSE: GSK) announced that the prestigious New England Journal of Medicine published results from a late-stage trial of its malaria vaccine, which showed that the vaccine provided significant protection against the disease in young African children. The results were announced in Seattle at a forum hosted by the Bill & Melinda Gates Foundation.

More than 3,000 miles away, the 60 employees of Lexington, MA-based Agenus (NASDAQ: AGEN) celebrated the experimental vaccine. Why? Because the vaccine, called RTS,S, is made with an immune-system-boosting plant extract that Glaxo licenses from Agenus.

Agenus is providing the extract, called QS-21 Stimulon adjuvant, for four GSK products that are in late-stage development. As those programs advance, Agenus will receive milestone payments and, for each product that makes it to market, it will receive royalties for 10 years after launch. The financial specifics haven’t been disclosed, but Agenus CEO Garo Armen says, “Our financial gain a few years out, if all these are successful, would be very very substantial.”

Indeed, QS-21 could be a savior for a company that has had its share of near-death experiences. Armen co-founded Agenus in 1994 with the goal of developing therapeutic vaccines containing “heat shock proteins,” which are designed to activate the immune system’s T-cells to fight diseases such as cancer. But the company, which was originally called Antigenics, has struggled to get the FDA on board with its experimental products, and so far has only one cancer vaccine approved in one country—Russia.

As the disappointments mounted, Agenus’ stock fell below $1, forcing the company to do a reverse stock split on September 30 to avoid getting delisted by NASDAQ. “We needed to get out of the penalty box. Being delisted … Next Page »

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I took the family to Boston on vacation in September. During the time away, I read Patrick Moore’s book “Confessions of a Greenpeace Dropout: The Making of a Sensible Environmentalist.“

Dr. Moore was one of the original founders of Greenpeace in the 1970s. I heard him speak recently. While he remains a passionate advocate for the environment, his commitment to science has put him at odds with many in the environmental movement. He seems to me to be a man who has the vision of a radical environmentalist-but now embraces unusual solutions that are more often associated with the radical right. He makes you think.

Moore, a Ph.D. in Ecology from the University of British Columbia, parted ways with Greenpeace in the 1980s when the organization began to take positions that, according to Moore, were more religious in reasoning than scientific. He said that the environmental movement had “abandoned science and logic in favor of emotion and sensationalism.”

Patrick Moore

One key example he cites of this anti-scientific reasoning was the Greenpeace campaign to ban the use of chlorine.

It didn’t matter that about 85 percent of our medicines are manufactured with chlorine chemistry or that the addition of chlorine to drinking water represented the biggest advance in the history of public health. By 1991, four years after I left, Greenpeace had adopted a resolution calling for an end to “the use, export, and import of all organochlorines, elemental chlorine, and chlorinated oxidizing agents,” stating, “There are no uses of chlorine which we regard as safe.” They might as well have called for a ban on living because it is not safe either.

A disillusioned Moore goes on in his book to make the case for forestry, hydroelectric and nuclear power, genetically modified food, and fish farming as being pro-environment. Like I said, he makes you think.

Of course, when it comes to ignoring science, neither side is without sin. I mention the trip to Boston, because during that time Republican Presidential candidate Michele Bachmann made her claims about the HPV cervical cancer vaccine. She said that the vaccine is a danger to society and could have negative effects on public health. She supported her claim by citing a conversation with an outraged parent who passionately argued that her daughter had become mentally retarded as a result of taking the vaccine.

Michele Bachmann

Now drugs and vaccines are not to be treated as if they were candy. They are controlled substances. If not used properly, they can be dangerous. But these vaccines have been studied in thousands of people around the world. Safety continues to be monitored by the US Centers for Disease Control (CDC) and the US Food and Drug Administration. More than 35 million doses of HPV vaccine have been distributed in the United States. The best science available shows that there are no serious safety concerns.

On the other hand, cancer is bad. The CDC says that most sexually active people will get HPV at some time in their lives, though most will never even know it. Every year, about 12,000 women are diagnosed with cervical cancer and 4,000 women die in the U.S.

I would guess that both Ms. Bachmann and Greenpeace advocates don’t like to be associated with each other. I would also guess that both are very committed to their causes and want to do the right thing-both for 12-year-old girls and for the environment. But in many cases, these advocates have let their passions overcome their intelligence.

Science is rarely clear. A really smart scientist once put it to me this way: “Is it possible that Martians will visit the earth tonight? Yes. But that doesn’t mean we should set another place at the dinner table.”

Definitive knowledge is in short supply. Throughout history, there are many examples of accepted scientific truisms being proved false.

We should make decisions based on the best available knowledge. Is it possible that there are unknown side effects from the HPV vaccine? Of course, but the best science available informs us that those risks are miniscule compared to the risk of cervical cancer. For my wife and me, this was a no-brainer decision when my daughter was that age.

As complex as medicine and biology are, the challenges in understanding the environment are no less daunting. We need to recognize that a lot of smart and able scientists are working diligently to better understand how to achieve environmental goals that, in the end, all of us share. I have no doubt that these scientists will learn things that will challenge conventional wisdom. We must continue to challenge ourselves and our understandings.

No one wants 12-year-old girls to get cancer. No one wants to ruin the environment. While we all have strong opinions on what is right, we must endeavor to be reasonable-and skeptical-even of ourselves. There are times when the facts, the science, or the situation changes and, as reasonable people, we need to change our minds.

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Seattle-based Immune Design has quietly pulled in another $11 million in venture capital. That new cash represents the second installment of a Series B financing that the company announced last July, when it was said to be worth as much as $32 million total.

Immune Design, the developer of new vaccine technology, disclosed the new financing in a regulatory filing that has been updated to say the Series B round could be worth as much as $34 million over time. Last July, the company pulled in $12 million, and now it has boosted the total financing up to $23.4 million in this round, according to the filing. The company didn’t issue a press release on the financing, but CEO Carlos Paya confirmed that the financing comes as a second tranche of the Series B financing. To date, Immune Design has pulled in $41.4 million between its first two rounds of venture capital.

The company has been one of the best financed biotech startups in Seattle, since it was founded in June 2008. Immune Design was founded by Nobel laureate David Baltimore of Caltech, Steve Reed of the Infectious Disease Research Institute, and Larry Corey, now the president of the Fred Hutchinson Cancer Research Center. It has raised its dough from a big name group of investors, including Versant Ventures, The Column Group, Alta Partners, and ProQuest Investments.

Immune Design CEO Carlos Paya

The vision of the company is based on developing two key technologies for vaccines. First, it’s aiming to create new synthetic compounds, called adjuvants, that boost the effectiveness of vaccines. Second, it is developing delivery technology that’s designed to trigger a specific immune defense against a certain invaders (like flu) instead of a more generalized immune reaction like the ones made by vaccines of today.

Paya, who joined Immune Design in April after a stint at Elan in South San Francisco, didn’t say what milestone the company hit to trigger the second tranche of financing. Immune Design’s biggest deal to date was a partnership struck last year with AstraZeneca’s MedImmune unit, in which the bigger company is getting access to an Immune Design adjuvant to enhance experimental vaccines for respiratory syncytial virus (RSV), Epstein-Barr virus, and cytomegalovirus (CMV) infections.

The late Ralph Steinman, the Rockefeller University biologist who won the Nobel Prize this week for his discovery of dendritic cells that alert other immune system cells to infections, was a member of the Immune Design scientific advisory board.

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[Updated: 10:28 am PT] Seattle-based Oncothyreon (NASDAQ: ONTY) is getting some new executive leadership, at least for a while, anyway.

CEO Bob Kirkman is taking what the company calls a “temporary medical leave of absence,” starting Monday, Sept. 12, according to a regulatory filing. While Kirkman is away, chairman Chris Henney will step in to take Kirkman’s place, according to the regulatory filing. The company didn’t say what kind of medical issue Kirkman is dealing with, or how long the leave of absence might last.

[Updated comment from company]. Kirkman is expected to return to Oncothyreon sometime in the fourth quarter of 2011, says Julie Rathbun, a spokeswoman for the company. The company isn’t disclosing Kirkman’s diagnosis out of respect for his privacy, she says.

Henney, who turns 70 this year, is well known as the co-founder of three of Seattle’s biggest biotech successes—Immunex, Icos, and Dendreon. The idea at Oncothyreon (on-koh-THEAR-ee-on) is similar in concept to what is being pursued at Dendreon. Oncothyreon is seeking to stimulate a patient’s immune system against cancer through a product known as Stimuvax. That drug is being developed in partnership with Germany-based Merck KGaA, and is expected to generate interim results from a pivotal lung cancer trial in the first quarter of 2012. Oncothyreon also has another cancer drug in its pipeline at an earlier stage of development.

Kirkman, who was listed at age 62 in the company’s most recent proxy filing, has been Oncothyreon’s CEO since September 2006. He previously worked at Seattle-based Xcyte Therapies, where Henney was also a member of the board.

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Seattle-based Theraclone Sciences is enjoying a moment in the national biotech spotlight today, just as it happens to be on the prowl for some new cash.

Theraclone was honored today as one of the Fierce 15, an annual award that the trade publication FierceBiotech gives out to 15 emerging biotech companies around the world. In a profile of the company today by FierceBiotech editor John Carroll, Theraclone acting CEO Steve Gillis says he wants to put together a new $10 million financing round for the company in the next few weeks and then complete the search for a permanent CEO. Theraclone has been without a permanent CEO since Dave Fanning died unexpectedly in June 2010.

Not very many Seattle biotechs end up garnering the national spotlight, although Fierce has typically recognized one or two companies a year from the Northwest. Last year, Bothell, WA-based Alder Biopharmaceuticals and Seattle-based VentiRx Pharmaceuticals made the cut, while Seattle’s Calistoga Pharmaceuticals (recently acquired by Gilead Sciences) took home the prize the year earlier.

Theraclone gained some visibility in the past year when it struck a partnership with Pfizer, and got some important work published in Nature about how its antibody-drug discovery technology can be used to potentially help develop an AIDS vaccine.

Gillis and Theraclone’s chief financial officer, Russ Hawkinson, didn’t immediately respond to e-mailed requests for comment about the financing.

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Most patients who take cancer drugs today get them through an intravenous infusion. Scientists have never been quite been able to consistently get this delivery route to work for genetically engineered cancer-fighting viruses, but San Francisco-based Jennerex Biotherapeutics is reporting today that it has found a way, in a move that could help its oncolytic viruses break out of a narrow market niche.

Instead of relying on a direct injection into a single bulky tumor, the usual way oncolytic viruses are delivered, Jennerex and its collaborators were able create an IV formulation that migrated from the bloodstream into tumors, according to research published this week in the journal Nature. The study looked at 23 patients with a variety of tumor types, and found that the drug made its way into tumors in greater amounts when given in an escalating series of doses. Side effects were mostly mild to moderate flu-like symptoms that lasted a few days, consistent with prior studies of the other formulation.

“The idea has been around for decades, but nobody has been able to show you could deliver [an oncolytic virus] through an IV. If you can achieve IV delivery, it opens up the possibility of treating 10-fold more tumors,” says David Kirn, the CEO of Jennerex, and the lead author on the scientific publication.

No one has yet come up with an FDA-approved therapy from this field of oncolytic viruses, although plenty have tried. Jennerex is one of a handful of companies, along with Calgary, AB-based Oncolytics Biotech (NASDAQ: ONCY) and Woburn, MA-based Biovex (recently acquired by Amgen), pursuing the method.

The basic idea here is to genetically modify viruses to selectively infect tumors, replicate like crazy in there, and cause the cancer cells to burst. Most of the treatments, Jennerex’s included, are also designed to provoke an immune reaction to mop up residual cancer cells. Jennerex reported some encouraging, albeit preliminary, results last May from a clinical trial of its experimental oncolytic virus, when it was directly injected into the tumors of 30 patients with liver cancer.

Jennerex CEO David Kirn

But the new intravenous study, which started about 18 months ago, gives Jennerex a potentially more attractive delivery route for liver cancer patients, and opens the door to treating other malignancies, beyond just helping people with inoperable liver tumors.

Here’s how the study worked. Researchers gave just a single IV infusion of Jennerex’s JX-594, and then followed up one week later to take a biopsy from each patient, Kirn says. Scientists looked at those biopsies a couple of different ways, through traditional pathology staining, and through quantitative PCR measurement, to see if the drug infected the tumor, and if so, to what extent. Patients were given an escalating series of five doses. While the drug didn’t appear to have any effect at the lowest dose, it infected tumors in increasing concentrations as the doses got higher, Kirn says.

“We were worried at the start that we were looking for a needle in haystack, that we could miss seeing a replicating virus if it was spotty in the tumor. What surprised us was the extent of replication in tumors,” Kirn says.

This work is still at a very early stage, so all the usual caveats apply. Researchers will need to show the IV method can work with the repeated dosing required in real-world cancer treatment, and that the drug can help people live longer with acceptable side effects. Doctors will want to know which specific forms of cancer are most vulnerable to this treatment method (so far, it looks like liver and colon cancer, Kirn says).

But the early findings are encouraging enough that Jennerex is incorporating the IV dose into the design of an ongoing a 120-patient Phase II liver cancer study, and plans to use it in a Phase III study to come later, Kirn says. Jennerex recently raised $8.5 million to finance the Phase II liver cancer study, which should be enough to run the company through the first quarter of 2013, when it expects to find out whether its drug offers longer survival times than today’s best supportive care, Kirn says.

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Seattle Genetics made waves both locally and nationally this week with an FDA approval that’s a historic step for the antibody drug business, and raises some interesting questions about the economics of cancer.

—Seattle Genetics (NASDAQ: SGEN) nailed down FDA approval of its first product on Friday. The drug, brentuximab vedotin (Adcetris) is designed to treat people with a couple of rare diseases, Hodgkin’s lymphoma and anaplastic large cell lymphoma. After 14 years in business and more than $500 million of R&D investment, Wall Street was betting this highly effective drug would command a premium price of about $110,000 per patient. And sure enough, Seattle Genetics came out with a high price of $13,500 per dose. It could end up costing anywhere between $108,000 per patient or $216,000 per patient, depending on how many doses patients get in the real world. CEO Clay Siegall did his best to defend the price when he was interviewed on Monday by CNBC. I argued in the BioBeat column this week that Seattle Genetics is in the rare position where it can justify a six-figure price tag. But if it really ends up costing $216,000 per patient … that might be worth another column.

—Seattle-based Dendreon (NASDAQ: DNDN), another cancer drug developer that knows all about the consternation surrounding high-priced therapies, had a small but noteworthy personnel announcement. Dendreon added John H. Johnson, the CEO of Savient Pharmaceuticals (NASDAQ: SVNT) and the former CEO of ImClone Systems, to its board of directors. Johnson was the CEO who turned ImClone around in the late 2000s, as its cancer drug became a $1 billion hit, and the company was acquired by Eli Lilly for $6.5 billion.

—Before all that news hit, I dug up an Xconomy exclusive on how Bayer’s Medrad unit has bid $125 million to acquire Kirkland, WA-based Pathway Medical Technologies. The deal still needs shareholder and regulatory approval before it can be finalized.

—Seattle-based Theraclone Sciences has been toiling away the past few years on broadly neutralizing antibodies against the HIV virus, and last week we saw some fruits from that labor. Theraclone, with support from the International AIDS Vaccine Initiative, was part of a national scientific collaboration that discovered 17 new broadly neutralizing antibodies which could become important new tools for AIDS vaccine R&D. The research was published in Nature.

—Seattle Children’s Hospital CEO Tom Hansen is deeply passionate about a simple, low-cost ventilator that he thinks can save the lives of premature infants around the world, and now he’s got some more support to take this idea through critical early tests. The Bill & Melinda Gates Foundation agreed to pump $2.3 million into the ventilator program.

—Lastly, we had an Xconomist Forum guest post from Steve Dickman at CBT Advisors in Boston, who argues that the latest social networking platform, Google+, has the potential to transform healthcare in ways that Google Health couldn’t. As always, your own trenchant observations about various biotech topics are welcome here. If you have an idea you’d like to write about for the Xconomist Forum that’s either local or national in scope, ping me at ltimmerman@xconomy.com.

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Our roundup of San Diego’s life sciences news is short and sweet this morning. Could these be the dog days of summer?

—Scientists from Seattle’s Theraclone Sciences, San Diego’s Scripps Research Institute, South San Francisco’s Monogram Biosciences, and the New York-based International Aids Vaccine Initiative (IAVI) have identified 17 new human antibodies that target a chink in the armor of HIV. Under their collaborative agreement, IAVI owns the rights to all the antibodies for potential development of an AIDS vaccine; Theraclone keeps commercial rights to the broadly neutralizing HIV antibodies for therapeutic purposes.

—San Diego-based Zogenix reported encouraging results from a late-stage efficacy study of hydrocodone bitartrate (Zohydro), an experimental extended-release pain-killer intended to treat moderate to severe chronic pain in patients who require 24/7 opioid therapy for extended periods. Zogenix says the pain-killer met its end point for efficacy and was safe and well-tolerated. If approved, the drug would be the first extended-release hydrocodone available without acetaminophen.

—San Diego-based TrovaGene, which was previously known as Xenomics, said last week it has regained development rights for transrenal technology for prenatal and cancer diagnostics. TrovaGene had licensed its technology to San Diego-based Sequenom (NASDAQ: SQNM) in 2008, only to learn that Sequenom had “mishandled” its clinical trials data. TrovaGene alleged in a 2009 lawsuit that Sequenom had deliberately falsified the data.

—In his BioBeat column, Luke says the volatility roiling the markets these days is not as bad as the 2008 financial crisis that triggered the great recession—despite all the scary talk. Even though biotech investments carry considerable risks, Luke says this is no time for life sciences investors to hide their cash under the mattress.

—DNA sequencing tools from companies like San Diego’s Illumina (NASDAQ: [[ticker: ILMN]]) and Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) are improving so fast that it will soon be possible to generate the 3-billion-letter signature of a person’s complete genome for $1,000—and possibly in as little as 15 minutes. Xconomy has organized an afternoon conference with prominent leaders in this emerging field to explain the implications for personalized medicine. The event will be held Oct. 24, at the Byers Auditorium on UCSF’s Mission Bay campus. Online registration is here.

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Scientists have never been able to make an effective AIDS vaccine, largely because the HIV virus is crafty, always finding ways to mutate and escape the body’s immune defenses. But now a national team of scientists has found antibodies that zero in on newly identified weak spots in the virus, potentially opening up promising new pathways for the development of an AIDS vaccine.

Researchers are reporting today in the journal Nature that they have discovered 17 novel antibodies that are all capable of neutralizing a broad spectrum of HIV strains, by hitting precise regions on the virus that are genetic common ground, no matter how many wily mutations the virus may make. The findings are being published by a team of scientists from Theraclone Sciences, a private biotech company in Seattle; The Scripps Research Institute in San Diego; South San Francisco-based Monogram Biosciences, a unit of Lab Corp of America (NYSE: LH); and the New York-based International AIDS Vaccine Initiative (IAVI).

The latest findings build on work this same team published two years ago in Science, when they identified two genetically engineered antibodies to hit two weak spots on the HIV virus. By finding so many more structural vulnerabilities in the virus, researchers now hope to take the next step by crafting compounds that can spur the body to make these antibodies, hitting the viral equivalents of Achilles’ heel. If this idea can be proven in future clinical trials, it could pave the way for the first vaccine against a disease that still kills an estimated 1.8 million a year around the world, according to UNAIDS.

“The more you understand the virus and characterize it, the better you can do at designing immunogens [ingredients for vaccines],” said Kristine Swiderek, the vice president of research at Theraclone. “It’s very exciting.”

Dennis Burton, a professor of immunology at Scripps and a lead author of the study, added in a statement that, “because of HIV’s remarkable variability, an effective HIV vaccine will probably have to elicit broadly neutralizing antibodies. This is why we expect that these new antibodies will prove to be valuable assets to the field of AIDS vaccine research.”

Theraclone's Russ Hawkinson and Kristine Swiderek

The far-flung collaboration of scientists got its start in a pretty basic observation from sub-Saharan Africa, where AIDS causes the most damage. Scientists there have long noticed that a few rare people can get infected with HIV, yet somehow retain robust immune defenses so they never get sick. IAVI and its collaborators have worked on clinical protocol to identify these special people and collect blood samples from them, which served as the essential raw material of this research collaboration.

IAVI, a global nonprofit supported by the Bill & Melinda Gates Foundation, provided the financial support for the collaboration with Scripps, Theraclone, and Monogram. Each of those parties played a distinct role, Swiderek says. Theraclone used its proprietary technology to produce the novel antibodies that could bind specifically with regions on the virus known as epitopes. The team at Monogram ran the screening tests of those antibodies against various strains of HIV in the lab. And the scientists at Scripps and IAVI worked together on characterizing those precious regions of the virus that are now thought to have potential as vaccine targets.

In the early days of the collaboration, Swiderek says the team worked on samples from just one individual donor, which yielded the first two antibodies described two years ago in Science. Emboldened by that progress—which marked the first time in a decade that any broadly neutralizing antibodies had been discovered—the team continued … Next Page »

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The Seattle-based Infectious Disease Research Institute said today it has hired Erik Iverson, a former associate general counsel for global health at the Bill & Melinda Gates Foundation, to fill a newly-created position of executive vice president of business development and external affairs. Iverson will work to create proprietary programs, and form partnerships, to advance the institute’s work on new vaccines, drugs, and diagnostics. Iverson “brings tremendous experience and relationships, along with a deep commitment to our global health mission,” IDRI CEO Stewart Parker said in a statement.

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I do. Millions of Africans do. Two of the world’s wealthiest people do. And against all odds, two U.S. biotech companies do too.

The story starts in Africa where about 7,000 new cases of sleeping sickness happen each year. If diseases could be classified as cruel and unusual, sleeping sickness would be at the top of the list. In the early stage, most people don’t know they are infected and the disease can be very mild. In stage 2 of the disease, the parasite enters the brain and things get really nasty. Hallucinations start and sick people have been known to chase their neighbors with machetes or to scream in pain at the touch of water on their skin. Only at the end does the sick person slip into a coma prior to death.

The drug melarsoprol, discovered more than 60 years ago, is the primary treatment for the deadly stage 2 disease. A derivative of arsenic, it kills about 8 percent of those who receive it, fails to cure one-third of those treated, and has a nasty habit of burning the veins of patients. The treatment is 10 painful days of intravenous injections. The only new treatment in decades is a combination product that lessens toxicity but is still challenging to deliver in African settings.

The 37 countries at risk and the 7,000 people sickened by the disease each year are mostly the rural poor in countries at war or in crisis. Not an attractive market by any measure. I sometimes think about a company CEO defending a business plan to venture capitalists that includes African sleeping sickness. Non-starter!

And yet two successful biotechs—Palo Alto, CA-based Anacor Pharmaceuticals (NASDAQ: ANAC) and Research Triangle Park, NC-based Scynexis—are doing just this. How can this work?

Anacor has boron chemistry as its basic platform. It turns out that these compounds have activity against many targets, including parasites. From the beginning, CEO David Perry has been committed to finding a way to use the company’s core assets to pursue targets that would improve human health-even in areas where the market would not support the return on investment typically needed. There was no way Anacor could spend venture capital money on global health targets.

So Anacor went to the non-profit organization Drugs for Neglected Diseases initiative (DNDi), which is run by Bernard Pecoul and funded by the Bill & Melinda Gates Foundation, Doctors Without Borders, and several other organizations. DNDi is a product development partnership that has built the largest ever R&D portfolio for kinetoplastid diseases such as this one. DNDi partnered with Anacor and also brought their existing partner Scynexis into the mix.

Anacor had found compounds with activity against the whole parasite Trypanosoma brucei. Essentially you mix the compounds and the parasites together and see which compounds kill the parasites. More interestingly, the compounds appeared to be active against both early and late stages of the disease. Anacor and Scynexis began working together in 2008 to develop a preclinical candidate from this compound series. Scynexis worked, with funding from DNDi, with the compounds to reach the optimal mix of safety, efficacy, and availability in the brain in order to pass the blood-brain barrier and be effective against stage 2 of African sleeping sickness.

Now this product—the first new oral drug candidate in decades targeted specifically toward African sleeping sickness—is going into a Phase 1 clinical trial.

Who wins in this situation? Anacor gets a small amount of non-dilutive financing that allows it to cover its costs and learns more about its drug chemistry platform. It has also expanded its proprietary boron chemistry library for no cost. Scynexis conducts this work on a fee-for-service basis as a contract research organization (CRO) and is able to use and build its expertise in parasitology. To work on one of the great unmet medical needs of our times has engendered pride and loyalty in the employees of both companies that goes far beyond the gyrations of the stock prices. DNDi gets two strong partners with the technology, the will, and the scientific capabilities to more quickly advance compounds and develop drugs against one of the most neglected of the neglected diseases.

Then of course there are those people who suffer and will continue to suffer from a disease simply because they are too poor to create a paying market. With an effective drug, sleeping sickness could go the way of other diseases that are on the brink of being eradicated.

It is very cool to say that you created a drug that extended peoples lives by three months and that the market cap of your company rose into the billions. But how much cooler is it to say that you lead a commercially successful company that also provided the tools for the potential eradication of a disease that afflicts the poorest in our world? I often talk to companies who say when we reach “X” milestone then we can think about global health. But this kind of partnership shows that there doesn’t have to be a trade-off. The benefits and opportunities of partnering in global health have never been better.

Learn more about this new Phase 1 clinical trial in PLoS Neglected Diseases:

Read the BIO Ventures for Global Health case study about this partnership:

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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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