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Boston Biotechs Seek Scarce Funds Amid Market Famine at Annual Pitch Event

Xconomy Boston — 

Many biotech firms in the Boston area and elsewhere are starved for capital, and initial public offerings appear to be off the table due to the economic recession. These harsh realities are likely to flavor the Massachusetts Biotechnology Council’s (MBC) annual MassBio Investors Forum next week, when 17 biotech outfits (including a new regenerative medicine startup with a new approach to developing stem cell therapies) plan to make the case for betting on their firms.

Due to the constraints on raising cash from venture firms and the other traditional biotech backers who usually attend the forum, the MBC has expanded its guest list of potential investors to include some 10 disease foundations—including the Cystic Fibrosis Foundation and Michael J. Fox Foundation for Parkinson’s Research—as well as an official from the National Cancer Institute who is launching a new Small Business Innovation Research grant program, MBC president Bob Coughlin told me.

The weakened financial market also presented fresh challenges for the MBC to have the annual event, Coughlin says. “A lot of the companies that used to sponsor these events were financial services institutions, and that money’s dried up,” he says. “By the same token, it’s very easy to get our member companies to participate because capital formation is the number one issue facing [many firms] in our industry.”

For instance, Idera Pharmaceuticals (NASDAQ:IDRA), a Cambridge, MA-based developer of drugs that modulate immune-system receptors to treat infectious diseases and other illnesses, is presenting at this year’s MassBio event to attract new equity investors and partners, CEO Sudhir Agrawal says. “I think our [target] audience is always the long-term shareholders, who can see the investment grow in time,” he adds.

Here’s an early glimpse of all the biotech firms slated to present at the investors forum on December 9:

Agile Therapeutics — Princeton, NJ

Agile is developing a contraceptive patch worn on the skin once per week to serve as an alternative to oral birth-control pills. The company last month announced the launch of late-stage clinical trials of its patch, which delivers low doses of the hormones progestin and estrogen to prevent ovulation. (New Jersey-based health care giant Johnson & Johnson makes a similar contraceptive patch, but Agile claims that its patch delivers a lower dose of estrogen, increased levels of which may cause blood clots.)

Alnylam Pharmaceuticals (NADAQ:ALNY) — Cambridge, MA

Everyone involved in biotech should by now know of Alnylam, a developer of RNA-interference (RNAi) drugs designed to switch on and off certain genes linked to diseases. Alnylam—which has already formed alliances and partnerships with such industry giants as Novartis, Roche, and Takeda potentially worth billions—says it wants to forge four or more additional partnerships in the next two years. (Greg wrote about Alnylam’s potential $1 billion development deal with Japan-based drug maker Takeda earlier this year.)

Alseres Pharmaceuticals — Hopkinton, MA

Alseres (NASDAQ:ALSE) is developing drugs and diagnostics for central nervous system conditions. The company’s lead drug is a protein-based treatment intended to promote nerve repair in patients with spinal chord injuries, and the firm aims to begin late-stage clinical trials of the product next year. This summer we wrote that the company raised $5 million in a convertible debt financing with former director Robert Gipson.

Ascent Therapeutics — Cambridge, MA

I caught up with venture-backed Ascent last month when the previously stealthy firm unveiled its technology and new executive team. Ascent is developing so-called pepducin drugs, which are peptide-based treatments that target cell surface receptors important in cancer, cardiovascular, and inflammatory diseases, among others. The company plans to identify its first pepducin for clinical development next year.

AuxoCell Laboratories — Amesbury, MA

AuxoCell, a regenerative medicine startup founded in January 2008, is new to the local biotech scene. The company is studying treatments based on stem cells taken from a jelly-like material in umbilical cords after birth—side-stepping the controversy over drawing stem cells from embryos, according to the company.

BioVex — Woburn, MA

BioVex is developing genetically modified viruses to treat cancer and infectious diseases. This spring Luke wrote about the positive results BioVex reported in a mid-stage clinical trial in which its lead drug—a genetically modified herpes simplex virus—partially shrank melanomas in more than a quarter of patients studied. The company hopes to close a major financing next year to fund further development of its treatments.

Dicerna Pharmaceuticals — Watertown, MA

Dicerna has garnered attention in the white hot RNAi field with its next-generation RNAi treatments. The venture-backed company, which says its offers alternative gene-silencing drugs to Alnylam’s and others, is developing drugs that block so-called Dicer enzyme and could be longer-lasting than competing RNAi drugs.

Dyax Pharmaceuticals — Cambridge, MA

Dyax (NASDAQ:DYAX)—a 13-year-old biotech company known for its oft-licensed phage display technology for drug discovery—has its sights set gaining FDA approval of its lead drug, DX-88, for patients with the rare and life-threatening condition hereditary angioedema. Luke caught up with the company this summer after it announced positive results from a late-stage study of DX-88, and I wrote a quick post recently about its financing deal to raise up to $50 million.

EnVivo Pharmaceuticals — Watertown, MA

EnVivo is advancing treatments for nervous-system disorders such as Alzheimer’s disease, Huntinton’s disease, and schizophrenia. In October, news broke that venture firm Fidelity Biosciences, based in Cambridge, invested $65 million in EnVivo in a Series D venture financing, buying out EnVivo’s other investors.

EyeGate Pharma — Waltham, MA

EyeGate offers potential relief for those of us who have had needles stuck in our eyes to treat such conditions as dry eye and uveitis. The venture-based company is developing a proprietary delivery technology to administer drugs to the front- and back-surface tissues of the eye—no needle required. We profiled the firm and its non-invasive approach to delivering eye treatments earlier this year.

Idera Pharmaceuticals — Cambridge, MA

Idera is a leading developer of DNA- and RNA-based drugs that target immune-system receptors called Toll-like receptors (TLRs) as a means of treating such ailments as hepatitis C and cancer. CEO Agrawal told me that his firm’s approach to modulate the receptors offers greater specificity than those of other firms that target TLRs. He adds that the company plans to continue to generate revenue through partnerships with pharma partners such as Novartis, U.S.-based Merck and Germany-based Merck.

In Silico Biosciences — (Virtual)

In Silico—which has provided contract research services for nervous-system-drug discovery since 1999—says it has identified a potential schizophrenia treatment that could be more effective than popular drug clozapine. The firm says it wants to raise $36 million to fund the project through mid-stage clinical trials.

Logical Therapeutics — Waltham, MA

Logical moved to the Bay State from Pittsburg last year after closing a $30 million second round of venture financing, with plans to develop a novel treatment for inflammation. Rebecca caught up to the crew at Logical at their new digs in Waltham late last year and wrote about the multibillion-dollar market the firm is aiming for with its novel form of naproxen, designed to reduce gastrointestinal side effects of traditional naproxen treatments.

Oscient Pharmaceuticals — Waltham, MA

Uniquely among presenters at the forum, Oscient (NASDAQ:OSCI) has two products on the market. The company sells fenofibrate (Antara) for high cholesterol and gemifloxacin mesylate (Factive), an antibiotic for bronchitis and certain forms of bronchitis. The company, which has yet to reach profitability, is seeking a convertible debt financing to raise funds.

Targanta Therapeutics — Cambridge, MA

Targanta CEO Market Leuchtenberger—who is also chairman of the MBC—is expecting to get word from the FDA on the company’s (NASDAQ:TARG) application for approval of antibiotic oritavancin on the day before the investors’ forum. The company’s stock took a hit late last month after an FDA panel voted narrowly in favor of not recommending the company’s antibiotic for approval to treat skin infections caused by antibiotic-resistant bugs.

Targeted Cell Therapies — Worcester, MA

Targeted Cell Therapies is developing technology to enable oral delivery of protein-based drugs, which are typically injected because of an inability of such treatments to clear the digestive system intact. The company’s lead drug is an oral drug for Gaucher disease, a rare lysosomal-storage disorder typically treated with Cambridge-based biotech firm Genzyme’s (NASDAQ:GENZ) imiglucerase (Cerezyme) injections.

Wolfe Laboratories — Watertown, MA

Wolfe is a CRO that says it’s seeking a $10 million investment to double its current space, triple its staff, and increase revenue by eight fold.

Ziopharm Oncology — New York, NY

Ziopharm (NASDAQ:ZIOP), which has R&D operations in Boston, is a developer of cancer treatments. The company has three molecules in clinical trials for the treatment of soft tissue tumors as well as liver and blood cancers.

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