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West Coast Bio Roundup: Shkreli, T4 Diabetes, Cella-Done, A16Z+Bio

Xconomy San Diego — 

So much for lying low. Investors led by Martin Shkreli have bought a majority of the shares of failed South San Francisco, CA-based KaloBios Pharmaceuticals, which has been in dire straits for some time after clinical failures and the abrupt departure of its longtime CEO David Pritchard earlier this year. For those of you just back from a six-month Antarctic expedition, Shkreli became the poster boy for drug industry greed earlier this year when his Turing Pharmaceuticals took over a drug to treat parasitic infections, often used by HIV patients, and raised its price 5,000 percent to $750 a pill.

Our former Xconomy colleague Arlene Weintraub details in Forbes Shkreli’s plans to revive one of KaloBios’s antibody-based drugs to fight the rare cancer CMML, or chronic myelomonocytic leukemia. The firm has tried to direct its antibody-based drugs against asthma, cancer, and infectious disease.

Former CEO Pritchard once told Xconomy that KaloBios had a chance to be a billion-dollar business. If Shkreli can make that come true, he’ll yet again be the industry’s center of attention. Let’s get to the rest of the roundup.

—Researchers at the Salk Institute in San Diego say they’ve gained insight into a type of diabetes that seems to strike elderly people who don’t have the weight gain associated with type 2 diabetes, the most prevalent form of the disease. In mice with a version of this diabetes—the researchers call it “type 4”—they found amongst the fat cells an abundance of immune cells called T regulatory cells, or Tregs. Instead of losing weight, the researchers say, the key to fighting type 4 diabetes could be losing Tregs. They plan to continue the work with fat samples from older, lean people—the kind you can practically scoop up by the dozens as they walk along the beach in Southern California. The paper was published Wednesday in Nature.

—Silicon Valley venture firm Andreessen Horowitz—or a16z in Valleyspeak—has raised a separate $200 million fund to invest in companies at the intersection of computer science and biology. To run the fund, the firm has tapped longtime Stanford University professor and polymath Vijay Pande. One of his projects was Folding@Home, an attempt to use a volunteer network of computers, working in their spare time, to solve exceedingly difficult protein biology problems. As Pande explained in this a16z blog post about the new fund, the declining cost of computational power has made that kind of solution seem quaint in a few short years, and it has also opened up new avenues for solving health problems with software. One area of focus for the new fund will be digital therapeutics, which Xconomy has covered in stories like this one.

—San Diego’s Celladon (NASDAQ: CLDN), which saw a crucial gene therapy trial fail earlier this year, is merging with Palo Alto, CA-based Eiger BioPharmaceuticals. If approved by Celladon’s shareholders, Eiger’s equity investors would become majority owners and the combined entity would take on the Eiger name. An investor syndicate has agreed to invest $39.5 million in the combined company, which would have a pipeline of drugs targeting four rare diseases: Hepatitis D, bariatric surgery-induced hyperinsulinemic hypoglycemia, pulmonary arterial hypertension, and lymphedema. As Ben Fidler reported yesterday, this type of white flag deal happens every so often in biotech.

—In related news, Paul Cleveland, who had been running Celladon up until the Eiger deal, has just been named the new CEO of Avalanche Biotechnologies (NASDAQ: AAVL), of Menlo Park, CA. Like Celladon, Avalanche also had a big miss in a gene therapy trial this year.

—D. Wade Walke, the top communications official at San Diego’s Isis Pharmaceuticals (NASDAQ: ISIS), told CNN that the company was mulling a name change after the Paris attacks perpetrated by the terrorist group that (sometimes) shares the same name. Despite no corporate news, good or bad, and a general Wall Street rally, shares in Isis dropped 4 percent to start the week, prompting the company to wonder if its name is having a negative effect.

—South San Francisco, CA-based diagnostic maker Veracyte (NASDAQ: VCYT) has appointed San Diego biotech veteran Tina Nova to its board of directors.

—San Diego’s Epic Sciences agreed to work with the University of Pennsylvania’s Abramson Cancer Center to identify biomarkers in circulating tumor cells (CTCs) that could predict response to cancer therapies.

—Thermo Fisher Scientific (NYSE: TMO) of Carlsbad, CA, said it is collaborating with Novartis and Pfizer on a companion diagnostic test that the pharma companies plan to use to help develop drugs for non-small cell lung cancer.

—San Diego-based Otonomy (NASDAQ: OTIC) is enrolling the first patients in a Phase 3 clinical trial of OTO-104 for Ménière’s disease, an inner ear disorder characterized by severe dizziness, vertigo, and gradual hearing loss. The company expects to enroll roughly 160 patients in the trial at clinical sites throughout the U.S.

—South San Francisco-based Threshold Pharmaceuticals (NASDAQ: THLD) said it has extended a licensing deal for the cancer drug evofosfamide with Germany’s Merck KGaA to include an option for Threshold to co-promote the drug in the U.S. if it comes to market. Evofosfamide is currently in Phase 3 trials.

—Chris Rivera, who recently ended his stint at the head of Washington state’s biotech trade group, has joined the advisory board of Seattle-based Stratos Group, a life science product development firm.

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