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Invest Northwest Notebook: Five of Seattle’s Next-Generation Life Sciences Innovators Seek to Adapt

Xconomy Seattle — 

No single company captured the lion’s share of buzz at this year’s Invest Northwest conference with a mega-partnership or a lucrative round of venture capital. But there were signs that the Northwest’s life sciences companies have adapted to life in a recession, and are continuing to get out of bed each day with plans to develop valuable new drugs, devices, diagnostics, and vaccines for the healthcare system.

Still, it is a bit amazing how event organizers managed to break an attendance record this year with 740 people registered, in the midst of this downturn. That didn’t happen this year at bigger investor events like the JP Morgan Healthcare Conference in San Francisco. What’s more remarkable is this happened even though Seattle’s biotech stars of the past—Immunex, Icos, Corixa, Rosetta Inpharmatics, Corus Pharma—have all gotten acquired and absorbed into larger companies.

The clearest explanation I heard of what’s happening here was from Chris Rivera, the new president of the Washington Biotechnology & Biomedical Association. “Our community is coming together in a time of need,” he said in his opening remarks.

So who are some of the people in the life sciences community who are moving ahead and doing the innovative entrepreneurial life sciences work now? Here are some updates on five intriguing local companies I was able to gather at the conference:

Alder Biopharmaceuticals, the Bothell, WA-based developer of “fast-follower” antibody drugs, drew an overflow crowd to hear its strategy. Alder has engineered its lead drug, called ALD518, to block the same IL-6 molecules that are hit by Roche’s Actemra for rheumatoid arthritis, but with a number of advantages over that drug, as CEO Randy Schatzman explained to me back in September. The Alder drug can last longer in the bloodstream, so it can be injected less frequently, possibly just three or four times a year instead of once a month, he said. Alder can also give its treatment in one-tenth the dose because it’s more potent, meaning that it’s cheaper to manufacture. And, since Alder’s drugs are made in fast-dividing yeast cells instead of the traditional mammalian cells, its production process is about four times faster at producing drugs, making much better use of all that expensive fermentation equipment, Schatzman said.

Based on this early progress in getting this drug into an ongoing Phase II clinical trial, Alder now expects to form a partnership later this year to co-develop the product with a major drugmaker, Schatzman said yesterday at the conference.

—Seattle-based Immune Design pulled in an $18 million Series A round of venture capital last June—the second-biggest initial financing of a local biotech last year (behind Seattle-based PhaseRx). As Immune Design CEO Steve Reed explained yesterday, the company has used that cash to start its first clinical trial, which combines its proprietary immune-boosting compound, called an adjuvant, to a flu vaccine made by Sanofi-Aventis. This adjuvant, according to Reed, is supposed to boost the effectiveness of flu vaccines for people over age 65, a fast-growing population who don’t get great protection from existing vaccines, Reed said. The compound is synthetic, making it cheaper and easier to mass produce than some older-generation adjuvants from natural products. It’s also far more potent than the MPL adjuvants he helped develop at Corixa, which are now incorporated into GlaxoSmithKline’s vaccine for human papillomavirus. It’s possible the new adjuvant-empowered vaccines could be so potent that they not only protect greater numbers of people from infections, but they ramp up the immune system faster than traditional vaccines—which might be handy in the case of an outbreak—and they could be effective with a single shot, as Reed explained to me in this feature in July.

The company’s technology comes from the Seattle-based Infectious Disease Research Institute, as well as a delivery vehicle, or vector, developed at Caltech by Nobel Laureate David Baltimore, that can “exquisitely target” dendritic cells that fire off warnings to the immune system to fight specific foreign invaders. The company has now staffed up to about 20 people, Reed says.

Reed had no shortage of quips in his presentation, either: “We’re trying to help President Obama spend some of his money, so after this, we’re going to home and start writing some more grants.”

—Seattle-based Allozyne plans to start its first clinical trial of its lead drug, AZ01 for multiple sclerosis, within the next month, according to Hans van Houte, the company’s vice president of finance and administration. This is on schedule (although just barely) based on the goals CEO Meenu Chhabra described to me back in October. What’s interesting is that Allozyne’s technology, licensed from Caltech, enables it to engineer a common interferon protein to carry a polymer molecule. That’s supposed to help it last longer in the bloodstream, and avoid the usual peaks and valleys of concentration that are thought to drag down the effectiveness of other treatments. This approach may make it possible for every-other-week or once-monthly injections, instead of the standard drugs that force patients to take more than one shot a week.

By the end of 2010, Allozyne expects to have finished a proof-of-concept clinical trial of AZ01, and will have two more drugs teed up for clinical trials to show the versatility of its protein engineering approach, van Houte said.

—Seattle-based Calypso Medical Technologies has had two years of experience now on the market with its device that provides what it calls “GPS for the Body.” This system helps treat prostate cancer by enabling technicians to precisely locate the prostate gland in real-time while patients lie still on the table for standard radiation therapy. If the beams go off target, they are likely to hit healthy tissue that causes a man to go impotent or incontinent. Not fun.

The Calypso system to solve this problem, not surprisingly, is not cheap. It costs $1,200 for the implantable transponders placed in every patient that send a signal to a piece of capital equipment, which costs $400,000 to $500,000. So far, more than 70 of these systems have been sold in the U.S., more than 2,800 patients have been treated, and the procedure has been performed more than 112,000 times, said Calypso vice president Mark Querry.

Still, that’s not much penetration of the market for prostate cancer, which is diagnosed in more than 186,000 men in the U.S. each year. Calypso has had its setbacks. It now has about 124 employees, Querry says, which is 24 fewer than it had the last time I wrote about this company, when it had a layoff in December.

—We haven’t heard much from Bothell, WA-based Liposonix since June, when the company agreed to be acquired by Scottsdale, AZ-based Medicis, the maker of Restylane wrinkle remover. Liposonix has designed an ultrasound machine, approved in Europe, which uses high-intensity beams directed under the skin to break up fatty tissue for the purpose of cosmetic body sculpting. The Liposonix machine is now marketed in the United Kingdom, Germany, Switzerland, Austria, Spain, Portugal, and Italy, according to a slide from Liposonix president Jens Quistgaard. Medicis has said publicly it wants to win FDA approval to start marketing this machine in the U.S. by 2011, “if not sooner.”

The deal allows Liposonix to keep its operation with 45 employees in Bothell, WA, and where it does manufacturing of this sophisticated equipment, Quistgaard said last August. He was clearly thankful that he had the fortune to sell the company for $150 million last summer, and continue building the operations here as part of a bigger company. “Medicis makes it so I don’t have to stand in front of you trying to raise money now, so that’s a fine thing,” he said in his Invest Northwest presentation.