We saw several San Diego biotechs raising cash over the past week, which might be a sign that some green shoots are emerging in the regional economy. Read up on that and the rest of San Diego’s life sciences news.

—Less than three months after its debut, San Diego’s new West Wireless Health Institute says its first clinical trial will test wireless heart monitoring technology developed by San Jose, CA-based Corventis. The multi-center trial will be supervised by Eric J. Topol, a cardiologist who is the institute’s chief medical officer, as well as the chief medical officer at Scripps Health in San Diego.

—Don Jones, who oversees Qualcomm’s wireless health initiatives, has been one of San Diego’s key figures in the convergence of healthcare and wireless technologies. Jones worked with Rob McCray, a former healthcare colleague, to form the Wireless-Life Sciences Alliance. McCray told me 2009 could be an inflection point for wireless life sciences in San Diego.

—San Diego’s La Jolla Pharmaceutical said in recent regulatory filings that worries over a lawsuit filed by former partner BioMarin Pharmaceutical of Novato, CA, have spooked an unidentified party that was interested in buying La Jolla Pharmaceutical. BioMarin, which acquired a stake in La Jolla as part of a partnership deal to co-develop a lupus drug, sued the San Diego biotech in an effort to dispose of its La Jolla shares more rapidly. The La Jolla drug failed in a big trial just a few weeks after BioMarin bought its stake.

—Accumetrics CEO Timothy Still says two developments expected later this year could expand the market for the San Diego medical device maker’s automated diagnostic instrument for measuring the effectiveness of anti-clotting drugs. One is a regulatory waiver that lowers the technical training required to use its device to test the effectiveness of clopidogrel (Plavix), one of the most-prescribed drugs in the U.S. The other is the expected launch of a new anti-clotting drug by Eli Lilly, called prasugrel.

—A new San Diego biotech startup, Sorrento Therapeutics, has raised $2.3 million in an equity investment. The investor wasn’t identified in the company’s regulatory filing, but Miami-based OpkoHealth said earlier this month it made an undisclosed investment in Sorrento, which is developing new methods for making fully human monoclonal antibodies.

—San Diego’s Halozyme Therapeutics (NASDAQ: HALO) raised more than $38 million earlier this week by selling more than 6 million shares of its stock through a secondary public offering. Halozyme specializes in developing and commercializing products targeting the extracellular matrix—a key component of connective tissue in animals. Halozyme aims to make products for the endocrinology, oncology, dermatology and drug delivery markets.

—San Diego’s Cytori Therapeutics (NASDAQ: CYTX) says it plans to sell as many as 7.15 million shares of its stock over the next 12 months through a private placement agreement to Seaside 88, a fund managed by Orlando, FL-based Seaside Capital Management. Cytori, which raised $850,000 in its first sale earlier this week, could raise a total of $20 million, depending on its share price.

—San Diego’s Vical (NASDAQ: VICL), which is developing DNA vaccines for cancer and infectious disease, says it has received a $1.5 million milestone payment from Merck for its development of a cancer vaccine based on Vical’s technology. Vical also met a mid-stage milestone in its own development of technology that can produce millions of doses of vaccines in a few days to fight pandemic diseases.

Comments | Reprints | Share:        

As a scientific advisor to CardioNet (NASDAQ: BEAT) (before the San Diego startup went public last year and moved to Pennsylvania), Eric Topol was in a position to see the coming wave of next-generation wireless technologies in healthcare. Among other things, Topol is the chief academic officer at Scripps Health in San Diego and director of the Scripps Translational Science Institute, a center funded by a $20 million grant from the National Institutes of Health that includes a focus on wireless healthcare.

Yet the prominent cardiologist recently told me he didn’t realize the potential of this emerging field of innovation until he attended a “Convergence Summit” that was organized last year by San Diego’s Wireless Life Sciences Alliance.

Dr. Eric Topol

“It really was the most eye-opening experience,” Topol said, “because all of a sudden, I realized this is just not a cardiology play on heart rhythm or blood pressure. This is going everywhere.” At the same time, of course, Topol said smart phones were hitting their stride and it was becoming apparent that 3G wireless networks were capable of carrying video and enormous amounts of data.

Using wireless networks to monitor cardiovascular function was an obvious opening for technology innovation because heart failure is a critical healthcare issue, and because heart arrthymias are often transitory and difficult to detect in a hospital setting. But Topol said the scope of potential opportunities hit him as he listened to presentations on using wireless technologies to measure patients’ blood sugar, monitor sleep disorders, track respiratory function, and a host of other medical applications. He saw how it would be possible to share data with patients on their own cell phones, along with related information. Asthma and allergy sufferers, for example, could get a report on their respiratory function as well as get air quality reports, pollen counts, and weather data.

“It’s an amazing time in medicine where this technology of wireless sensors and wireless systems have been cropping up at quite …Next Page »

Comments (4) | Reprints | Share:        

Within the span of a few months, it seems as though wireless healthcare has come into focus as an emerging area of innovation and technology convergence.

That has been especially true in San Diego, where the Gary and Mary West Foundation committed $45 million at the end of March to create the West Wireless Health Institute. Yet the institute actually represents the culmination of years of work behind the scenes by representatives of Qualcomm, the San Diego wireless industry giant, Scripps Health, Johnson & Johnson, and a handful of other key players.

As the opportunities for innovation become more apparent, San Diego’s James Sweeney is gaining broader recognition as an industry exemplar. As Xconomy’s Juha-Pekka Tikka recently reported, Sweeney founded CardioNet (NASDAQ: BEAT) a decade ago to create wireless technology that helps doctors diagnose irregular heartbeats by allowing them to continuously monitor a patient over three weeks. Following CardioNet’s successful stock market debut last year—a notoriously bad year for IPOs—the company currently has a market valuation of more than $430 million.

Which certainly helps justify Sweeney’s introduction as “the first grandmaster of wireless health in the business world” when he took the stage yesterday as a keynote speaker for the Wireless-Life Sciences Convergence Summit in San Diego

Sweeeney’s key point, which he repeatedly emphasized, is that technology innovation alone is not sufficient to create a successful business in wireless healthcare. “In the world we’re moving into, more than ever, if you can’t justify the cost benefits, then you will fail,” Sweeney said. “In my view, getting the FDA’s approval is not nearly as hard as getting the CPTs and insurance reimbursement approvals.” (He’s referring to codes for Current Procedural Terminology established by the American Medical Association to facilitate billing Medicare and health providers.)

Sweeney said healthcare represents the largest industry on the planet—a $3 trillion juggernaut with an estimated $600 billion wasted every year. Eliminating even a small part of that waste can lead to an extraordinarily successful business in healthcare. But “you are not going to get paid for cool ideas,” Sweeney said. “You are not going to get paid for saving lives. You are not going to get paid for anything unless you can prove that you can save them money.”

In a wide-ranging discussion, Sweeney offered other advice to aspiring wireless healthcare entrepreneurs:

—”I encourage you to think of really big ideas,” Sweeney said. “This is the most exciting time I’ve ever seen in healthcare, and there are unlimited resources available even in this economy for the right idea.”

—India recently unveiled plans to build 5,000 hospitals throughout the country over the next 10 years. “I think that could be an easier testbed for some of these incremental changes,” in technology, Sweeney said.

—Because the recession has caused a sharp drop in philanthropy, hospitals are “almost paralyzed” when it comes to approving new capital outlays, Sweeney said. So it’s easier to propose innovative technology as a service that hospitals can pay out of their operating budget.

—The physician still is key to developing a successful business. So you have to get a leading physician who really believes the innovation you are bringing to market is something that will benefit patients.

—”Physicians want to do the right thing. They want to improve medical care for their patients. And they want to make money—and not necessarily in that order,” Sweeney said. “It’s much easier to get them to change their behavior if you can improve the care for their patient—and make them money,” and making them money includes saving them money.

—”Every venture capital firm I talk to today says, ‘We’re only involved with late-stage companies and we’re only involved in companies with positive cash flow,’ ” Sweeney said. “And I say, ‘I know three companies that meet that criteria. So what are you doing with the rest of your money?’”

Comments (1) | Reprints | Share:        

Although the financial meltdown has hit San Diego’s venture community pretty hard, Lux Capital’s Larry Bock says he made his most-successful investments during the biotech nuclear winter of the early 1990s. So what areas of venture innovation seem promising today? That’s what Xconomy is here for, my friends. Read on.

— Serial healthcare entrepreneur James Sweeney sees a wave of innovation coming in the field of wireless healthcare, and it might be worth listening to what he has to say. As Xconomy’s Juha-Pekka Tikka reported, one of the eight healthcare companies he founded was CardioNet, which is now regarded as the first commercially successful wireless health company in the United States. Sweeney will discuss his vision for wireless healthcare this Thursday morning at the Convergence Summit organized by San Diego’s Wireless Life Sciences Alliance at the Estancia La Jolla Hotel & Spa.

—For a company locked in a proxy fight, San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) did a good job last week of showing it doesn’t need billionaire investor Carl Icahn to cut its costs or to advance new drug products. Amylin said Monday it plans to lay off 200 sales reps, or 11 percent of its global workforce, as part of a sales reorganization. On Tuesday, the diabetes drug developer said it had submitted a new drug application to the U.S. Food and Drug Administration for exenatide, its once weekly drug for type 2 diabetes.

—The price of shares in Acadia Pharmaceuticals (NASDAQ: ACAD) more than doubled on Monday, when the San Diego biotech said it stands to get as much as $395 million in milestone payments from Biovail, Canada’s largest publicly traded pharmaceutical. Acadia’s stock lost some of its altitude through the week, closing at $1.81 a share on Friday, after trading above $2.60 a share Monday. Acadia has scheduled a conference call this afternoon to discuss its Q1 financial results and drug development programs.

—San Diego’s Vical (NASDAQ: VICL) said it is nearly ready to begin producing a prototype vaccine for the H1N1 influenza, aka swine flu . In a Q1 conference call Thursday, Vical CEO Vijay Samant said the company should be ready to start making vaccines this week that are suitable for clinical trials. “We are talking of production time of six to nine weeks rather than six to nine months with conventional vaccines,” Samant said.

—Spectrum San Diego is ready to introduce its CarScan technology next week at the Force Protection Equipment Demonstration conference in Stafford, VA. Spectrum’s founding CEO Steven W. Smith, who is an expert in digital signal processing and ultra-low level X-ray emissions, told me the car-scanning technology he developed produces clearer images of interior compartments by combining two different types of ultra-low level X-ray emissions. Motorists can remain in the car while it’s being scanned.

—Reva Medical, which got $42 million in venture capital in 2007 after clawing its way back from near death when the market for its metal stent collapsed, is preparing to move to human studies of its fully dissolvable cardiac stent. CEO Robert Shultz told Xconomy’s Denise Gellene the clinical trial will likely include 300 to 500 patients and take two …Next Page »

Comments | Reprints | Share:        

A major focus of the American Recovery and Reinvestment Act (Stimulus Act) that President Obama signed in February is to improve the quality and expand the scope of health information technology in the United States. One of the central goals is to develop a nationwide health IT infrastructure and transfer all Americans’ health records to electronic format by the year 2014.

Under the Stimulus Act, the Office of the National Coordinator for Health Information Technology (ONCHIT) received a $2 billion appropriation to achieve these goals. The funds will remain available until expended; however, the law requires that certain portions of the funds must be allocated to specified groups. ONCHIT will be advised by two policy committees comprised of members from the various sectors of the health-care industry. ONCHIT is charged with a number of oversight activities, including the development of uniform health IT standards to allow interoperability among diverse health IT systems. “Making the electronic health records dream a reality will depend upon the successful development of uniform HIT standards,” said Andrew Gantt, a partner in the Health Care and Life Sciences Group at the Washington D.C. office of Latham & Watkins. “This is critical to ensuring that multiple electronic health records technologies are able to communicate effectively with each other.”

One of the named recipients under the Stimulus Act is the National Institute of Standards and Technology (NIST). NIST will receive $20 million of the budget allocation to continue advancing the use of health IT. The law also earmarks $300 million to support sub-national and regional efforts in their advancement toward health information exchange.

The Stimulus Act also contains various financial incentives to specified groups who adopt and increase their use of electronic health records and health IT. Medicare providers, for example, are entitled to receive up to $44,000 ($48,400 for providers in a professional shortage area) of funding if they adopt and engage in a “meaningful use” of certified electronic health records technology. The standards that providers must meet to satisfy the “meaningful use” requirement in order to receive incentive payments include, among other things, the ability to connect in a way that provides for the electronic exchange of health information and a willingness to report information on clinical quality measures to the Department of Health and Human Services.

The law also incentivizes Medicare providers by penalizing them if they do not become electronic health users by 2015 through a one to five percent reduction in payment the providers would otherwise receive. Similar financial incentives, which can total $63,750, are available for Medicaid providers who implement electronic health records technology. Providers eligible for both Medicare and Medicaid incentives may only receive incentives from one or the other.

Hospitals are also entitled to receive funding under the Stimulus Act if they can demonstrate that they are “meaningful users” of electronic health records technology. A formula determines the amount that hospitals can receive, with the amount starting at $2 million. Grants will also be available to universities that develop centers designed to generate innovative approaches to the use of health IT.

State or state-designated entities are also eligible to receive grants if they submit a plan describing activities to be carried out to facilitate the exchange of health IT. In addition, regional centers that assist in the promotion and advancement of health IT may receive grants for the continued development of technological approaches. To secure their grants, however, these groups must contribute matching funds up to a certain percentage of the federal funds they intend to receive.

Universities and clinical health education programs that expand educational programs focusing on medical information are eligible to receive grants, if they contribute matching funds of at least 50 percent of the cost of the program. In addition, the Stimulus Act authorizes the establishment of loan programs, administered by states and Indian tribes, to health care providers who facilitate the adoption of certified electronic health records technology. Like many other incentives, however, the entity receiving the grant must match the federal funds received with a percentage of the amount received.

Advancing and expanding the use of electronic health records across the United States is a top priority under the Stimulus Act. With financial incentives being provided to various groups to facilitate the shift to electronic records, and a renewed drive to develop uniform health IT standards, the goal of having all Americans’ health records in electronic format is more likely to be attained.

Comments (1) | Reprints | Share:        

San Diego’s James Sweeney is a big-time health-care innovator and entrepreneur. Although he’s relatively unknown to the general public, Sweeney has founded and created eight successful health-care companies—Caremark, CarePartners, CareGivers, Central Admixture Pharmacy Services, or CAPS, McGaw, Coram, Bridge Medical, and CardioNet.

Sweeney founded his first company in 1979 as Home Health Care of America, (It later became Caremark) and gained recognition as a pioneer in the field of home infusion therapy. He sold Caremark in 1987 to Baxter (NYSE: BAX) for approximately $600 million.

Now Sweeney is focused on a wave of innovation he sees coming in the field of wireless healthcare, an area where he says he has been working “feverishly” for the past decade. He also happens to be listed as the keynote speaker on May 14th at a “Convergence Summit” organized by San Diego’s Wireless Life Sciences Alliance at the Estancia La Jolla Hotel & Spa.

Sweeney founded CardioNet (It’s Nasdaq ticker symbol is BEAT, a great designation) in 1999, initially to focus on using remote wireless technology to diagnose irregular heartbeats, which can be transitory and therefore difficult to detect. CardioNet now is regarded as the first commercially successful wireless health company in the United States, with a market valuation of more than $425 million following its successful IPO in March 2008. (New management moved the company, which was based in San Diego, to Pennsylvania after Sweeney resigned last year.)

A month ago Sweeney started as CEO of San Diego-based IntelliDot, founded in 2002 to provide hand-held barcode solutions for hospitals. “This company in its current form is of no interest to me,” Sweeney says. “I have a vision of what can happen in terms of wireless technology and applications. I intend to take the company forward into providing lots of wireless connectivity to patients, nurses, and hospitals, and taking data out of the hospital into outside servers. That is where all of us are going.”

Sweeney says he identifies new business opportunities by seeing how healthcare fails to meet patient needs, and he uses common-sense and technology to provide a solution. The result is often a huge new business.

He says his vision for IntelliDot “starts with patient safety, with what we can do to protect patients in a hospital. Medicare has created a new descriptive category called Never Events—things that should never happen to you.” IntelliDot, with 65-70 employees is, according to Sweeney, now refocusing on 20 innovations that would dramatically reduce Never Events and create “smart hospital room.”

Sweeney says he became an entrepreneur out …Next Page »

Comments (1) | Reprints | Share:        

We saw several San Diego innovators making waves last week. Bridgepoint Education defied the recession by going public, Sapphire Energy upped its production estimates due to a technological breakthrough, and a wave war erupted among San Diego’s wave makers. So this is how things looked during the week:

—San Diego’s Bridgepoint Education (NYSE: BPI) priced its initial public offering at $10.50 per share, which netted the online education provider $142 million. Bridgepoint had indicated earlier it hoped to raise as much as $216 million. Bridgepoint’s biggest investor is Warburg Pincus, but the National Venture Capital Association still says Bridgepoint is the first venture-backed IPO of the year.

—San Diego’s Sapphire Energy, which is building a production facility for its algae-to-biofuel technology near Las Cruces, NM, doubled its production estimates for 2011. Sapphire now says it will produce a million gallons of “green crude” in two years, and a billion gallons by 2025. The startup company backed by Bill Gates’ Cascade Investment has participated in successful test flights in recent months that substituted jet fuel made from Sapphire’s “green crude” for conventional jet fuel.

—Philanthropist Gary West told me the West Wireless Health Institute will be fully operational this summer in San Diego’s Torrey Pines Mesa. West, who is the founding chairman, says the institute will be “a catalyst for wireless health” as remote monitoring of vital signs becomes more commonplace in coming years.

—Bruce caught up with EasyTaxFix co-founder Adam Berkson, whose online company helps homeowners lower their property taxes by automating the appeal process. Berkson told Bruce they were successful enough in San Diego in November to expand into other California counties, New Jersey, and the Phoenix, AZ, metro area.

—As the recession has worsened, the four software CEOs who formed San Diego’s DaggerBoard Advisors have seen changes in the type of help that local software startups are seeking. San Diego’s software startups are looking for interim management services, because …Next Page »

Comments | Reprints | Share:        

A family foundation established by telemarketing entrepreneurs Gary and Mary West today committed $45 million to help establish one of the world’s first medical research organizations to use wireless healthcare technologies. The San Diego-based West Wireless Health Institute also is supported by Scripps Health as a founding health care affiliate and Qualcomm as a founding sponsor.

The new institute is dedicated to advancing health and well being through the use of wireless technologies. Its board of directors will be chaired by founder Gary West, and include Dr. Eric J. Topol, Chief Academic Officer at Scripps Health, and Donald Jones, vice president of Health and Life Sciences at Qualcomm.

In a statement released by the Institute, Gary West says he believes “this emerging field will completely transform health care as we know it.”

“The rapid and remarkable progress in wireless sensors – continuously tracking important parameters such as blood sugar, blood pressure, all vital signs, sleep state and even caloric intake and expenditure – has the potential to change medicine in a radical and unprecedented way,” said Dr. Topol. Under his leadership the Institute “will conduct clinical research on solutions to better prevent, diagnose, manage and treat major health conditions, ranging from Alzheimer’s to heart disease to obesity.”

Gary and Mary West founded West Telemarketing in 1986, and shifted to providing computer answering services and other communication-based relationship management technologies. Their renamed West Corp. became a public company in 1996, and reached annual sales of $1.5 billion in 2005. They formed the Omaha, NE-based Gary and Mary West Foundation in 2007 after West Corp. was taken private in 2006 in a deal with Thomas H. Lee Partners and Quadrangle Group.

Comments | Reprints | Share: