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West Coast Biotech Roundup: Tracon, Mirati, Third Rock, & Dendreon

Xconomy San Diego — 

This week, we’ll take our roundup on a West Coast roadtrip from south to north. First, down San Diego way, the news the past seven days was mostly financial, led by Tracon Pharmceuticals’ IPO. In San Francisco, Genentech had breakthrough news, while KaloBios had more bad news. And in Seattle, bankrupt Dendreon found a potential buyer. As some of us get ready for a Pineapple Express weekend, please remember, friends: don’t bogart that roundup.

—San Diego’s Tracon Pharmaceuticals (NASDAQ: TCON), founded in 2004 to develop new drugs for cancer, age-related macular degeneration and fibrotic diseases, raised $36 million Jan. 30 through an IPO. Tracon’s lead product candidate is an antibody aimed at treating various solid tumors. The deal was a comedown from Tracon’s earlier projections. According to its initial IPO filing, Tracon sought to raise more than $57 million.

—AutoGenomics, which sells a molecular diagnostics system for genetic testing in clinical laboratories, set the terms for its IPO on Monday. The Vista, CA-based company, founded in 1999, wants to raise $45 million in its second IPO attempt. The company first filed for an IPO in 2008, intending to raise $86 million, but withdrew the offering in 2011.

—San Diego’s Mirati Therapeutics (NASDAQ: MRTX) said it raised nearly $52 million from a secondary public offering of almost 2.6 million shares. Mirati has been advancing three drug candidates through clinical development for treating various cancers.

—After years of clinical and regulatory wrangling, Sanofi launched the inhaled insulin product Afrezza Tuesday, which was developed by Mannkind of Valencia, CA.

—Third Rock Ventures has committed $45 million to launch Revolution Medicines to develop drugs based on substances found in nature. Its first program will aim to improve upon the 60-year-old antifungal treatment amphotericin-B, which was originally derived from a bacterium.

—Roche’s Genentech division, in South San Francisco, CA, said Monday that its anti-PD-L1 immunotherapy MPDL3280A has received the breakthrough therapy designation from the FDA for non-small cell lung cancer. (It is still waiting to receive a better name than MPDL3280A.)

—Ultragenyx Pharmaceutical (NASDAQ: RARE) of Novato, CA, a developer of treatments for rare diseases, launched on Wednesday a $162 million secondary offering of its shares, selling 3 million at $54 a share. Underwriters can buy up to 450,000 additional shares.

—Armetheon of Menlo Park, CA, said Thursday it has raised a $24 million Series B round, led by Hercules Bioventure Partners and Capital TEN II. The cash will mainly go toward a pivotal trial of its anticoagulant tecarfarin.

—Ardelyx (NASDAQ: ARDX) of Fremont, CA, reported Monday that chronic kidney disease patients taking its experimental drug tenapanor suffered higher-than-expected side effects of diarrhea in a Phase 2 study, which sent the company’s stock down more than 40 percent by Thursday’s market close. The drug is partnered with AstraZeneca (NYSE: AZN).

—Redwood City, CA-based Guardant Health raised a $50 million Series C round to expand availability of its Guardant360 blood-based cancer test.

—KaloBios Pharmaceuticals (NASDAQ: KBIO) of South San Francisco said Tuesday it would let go its chief medical officer and more than 20 percent of its staff after the Phase 2 failure of its antibody to treat bacterial infections in cystic fibrosis patients. Last month, CEO David Pritchard abruptly resigned and left the reins of the company in the hands of CFO Herb Cross.

—Seattle’s Dendreon (NASDAQ: DNDN) found a “stalking horse” for its bankruptcy auction, and it was Valeant Pharmaceuticals (NASDAQ: VRX), the most acquisitive drug company on the planet. Our Ben Fidler explained how it all works in this report. Since that story, Valeant has boosted its bid from $296 million to $400 million, according to court filings. An auction could take place next week.