Author: Denise Gellene

Denise Gellene wrote:

San Diego’s Cibus Global is uniting with Canada’s flax growers to develop a crop strain resistant to glyphosate, the active ingredient in the widely used weed killer Roundup. Flax, also known as linseed, is a major crop grown for both its seeds and fibers, with various parts of the plant used to make linen and other fabrics, dyes and inks, medicines, and other products.

The Flax Council of Canada is investing about $5.5 million in the partnership, including the proceeds of a $4 million grant it received from the Canadian government. Revenues from the new strain of seed would be split between the Flax Council and Cibus, according to Barry Hall, president of the growers’ group.

The deal moves little Cibus closer to competition with Monsanto, the agri-industry giant which markets both Roundup and lines of crops that are genetically engineered to resist the herbicide. Weed killers containing glyphosate are available as generics.

Monsanto’s Roundup-resistant strains account for much of the corn, cotton, and soybeans grown in the U.S. But genetically modified crops have received only limited acceptance (and sometimes harsh criticism) in Europe, which imports 70 percent of Canada’s flax crop. Much of the flax is used to produce linseed oil, which is used in paints, linoleum flooring, and inks.

Cibus believes its technology for producing new crop strains is less …Next Page »

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UNDERWRITERS AND PARTNERS

Denise Gellene wrote:

Progress on the drug development front dominated the headlines in the past week, although one company, Phenomix, also had some bad news. Get those details and more here.

—Phenomix announced that diabetic patients who took its experimental drug dutogliptin in a clinical trial saw statistically significant drops in their blood sugar. But the company is looking for a new strategic partner to help develop dutogliptin after New York-based Forest Laboratories said it had terminated its alliance with the San Diego biotech.

—My end-of-flu-season wrap up showed some San Diego companies received a temporary revenue boost from sales of products related to swine flu, and at least one company garnered enough funding to continue work on a H1N1 vaccine.

—Luke profiled Amplyx, a startup that is working on redesigning existing drugs to make them more effective or tolerable. The company’s first project is to develop improved protease inhibitors for H.I.V.

—Anadys Pharmaceuticals (NASDAQ: ANDS) reported promising interim clinical trial data for its experimental hepatitis C drug ANA598. The results were announced at the European Association for the Study of the Liver meeting in Vienna, Austria.

—Luke chatted with Nobel laureate Roger Tsien of UC San Diego about his startup company, Avelas Biosciences, which is working on fluorescent molecular tags that surgeons may use to distinguish tumors from healthy tissue.

—Ligand Pharmaceuticals (NASDAQ: LGND) earned a $6.5 million milestone payment from Switzerland-based Roche for advancing its experimental hepatitis C drug RG7348 into clinical trials. Ligand obtained the drug through its acquisition of Metabasis Therapeutics; Metabasis shareholders will receive $2.7 million from the milestone payment.

—The Sanford-Burnham Medical Research Institute promoted Kristina Vuori to president from her previous position as executive vice president of scientific affairs. John Reed will continue as CEO of the institute.

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UNDERWRITERS AND PARTNERS

Denise Gellene wrote:

As swine flu raced through colleges and communities last summer and fall, at least five San Diego companies with flu-related products or research programs saw their share prices surge. Investors were betting that swine flu, the predominant circulating flu virus in the U.S., presented a real opportunity for these companies.

Now comes the reckoning. The influenza season, which normally runs from October through May, is winding down. An update issued April 9 by the national Centers for Disease Control and Prevention said influenza cases were declining or stable throughout the country, and the percentage of all doctors’ visits by patients with flu-like symptoms had fallen to 1.1 percent—well below the seasonal norm—from a high of 7.8 percent last October.

Last September, I looked at San Diego companies with stakes in swine flu. The time has come to see how they have actually performed since the World Health Organization declared a global H1N1 swine flu pandemic in June.

—I’ll begin with Quidel (NASDAQ: QDEL). The diagnostic-test maker received special government clearance last summer to market its QuickVue rapid flu test for swine flu. The company told investors last summer it expected a revenue bump from sales of the tests.

And how. Quidel reported a 38 percent increase in 2009 net sales of infectious disease-related products. Total revenue jumped 28 percent for the year, driven by global sales of influenza products. Quidel’s shares are up about 12 percent since last June.

However, Quidel has already warned investors not to expect a repeat of its 2009 financial performance. “We do not plan for or expect the influenza pandemic of 2009 to recur in 2010. Accordingly, we expect a significant decrease in our influenza test sales, related earnings, and cash flows during 2010,” Quidel said in its annual filing with the SEC.

—Life Technologies (NASDAQ: LIFE) produces equipment that runs a diagnostic test, developed and distributed by the CDC, that can determine if patients are infected with the specific strain of the influenza A virus that causes swine flu.

The test has become the de facto standard in H1N1 detection, which makes Life’s equipment a must-have for public health labs. Life experienced an equipment-buying frenzy last spring, followed by an increase in sales of reagents to run the swine flu tests. The products contributed …Next Page »

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Denise Gellene wrote:

We heard in the past week from key experts who shared their views on the funding climate and the potential of emerging computational technologies. Our recap follows.

—Histogen said its Hair Stimulating Complex produced “statistically significant” new hair growth after one year among the 24 balding patients who participated in a clinical trial conducted in Honduras.

—Avalon Ventures, one of the few San Diego venture capital firms still investing in early-stage life sciences companies, is talking about raising a ninth fund, Luke reported. He chatted with principals Jay Lichter and Kevin Kinsella about the investing climate.

—San Diego is well-positioned to play a significant role in advancing computational biology, said Paul A. Rejto, director of computational biology in oncology research at Pfizer. He discussed the technology and its potential impact on drug development in a Q&A.

—San Diego has all the ingredients to become the number one biomedical informatics center in the country, said UC San Diego’s Lucila Ohno-Machado, director of biomedical informatics at the medical school. She discussed the technology with me in a Q&A.

—Amplyx Pharmaceuticals, a San Diego-based drug developer, has raised an initial round of $1.5 million in financing. The investors included Golden Seeds, Life Science Angels, and Tech Coast Angels.

—AltheaDx, a San Diego-based developer of molecular diagnostics, closed its $6 million Series A round of funding. The funds will support development of diagnostics that predict whether a drug is safe for certain people.

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Denise Gellene wrote:

San Diego’s role in computer analytics dates back to at least 1969, with the founding of Science Applications Inc., now SAIC, which used computer models to predict the effects of nuclear blasts for the Government. Today, a life sciences industry that didn’t exist in San Diego 40 years ago is embracing increasingly powerful computational tools to make sense of the massive amounts of data resulting from genetic discoveries and advances in molecular profiling.

Among the leaders in this emerging field is Paul A. Rejto, director of computational biology in oncology research at Pfizer in San Diego. A physical and theoretical chemist, Rejto started in 1994 at Agouron Pharmaceuticals, a San Diego biotech that became part of Pfizer in 2000. We caught up with Rejto by e-mail last week to find out more about the technology, its role in pharmaceutical research, and its importance to San Diego.

Xconomy: What is computational biology?

Paul Rejto: As with many interdisciplinary fields, there is no single well-established definition. Computational biology broadly refers to the application of computational and informatics approaches to address questions in biology. A number of other terms describe activities at this interface, with slightly different flavors. Bioinformatics is typically more focused on algorithms for sequence manipulation and analysis, and biomedical informatics is more focused on the acquisition and analysis of patient data and outcome.

X: What are some applications of computational biology?

PR: As you might imagine there are many applications. Here in the Pfizer Oncology Research Unit, we are applying computational approaches to support two major objectives: 1) identification and credentialing (or validation) of oncology targets, and 2) linking targets to patients using predictive markers of response. Our chief scientific officer, Neil Gibson, refers to these efforts as the bookends of the research portfolio – in other words, we support the selection of projects that are initiated within research and help to ensure a successful path for those projects moving forward out of research into the clinic.

To credential new targets, we use genomics and transcriptomics to assess targets and pathways in well-defined populations with unmet medical need, and look for evidence of functional activation. To accomplish this, we work closely with our commercial colleagues to ensure …Next Page »

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Denise Gellene wrote:

Experts agree that electronic medical records can lower costs and improve care. Yet just 10 percent of U.S. hospitals keep any computerized records, according to a survey in the New England Journal of Medicine last year. The biggest reason is cost: depending on the size of the hospital, the price of a digitized record system can run from $20 million to $100 million.

Carlsbad, CA-based Medsphere Systems is marketing what it bills as a cost-effective solution. The company has taken the electronic medical record system developed by the Veterans Health Administration and adapted it for commercial use.

Developed over two decades with more than $8 billion from taxpayers, the source code for the VA system is in the public domain. This means software developers and startups like Medsphere are free to use and modify the code known as the Veterans Health Information Systems and Technology Architecture, or VISTA. (The acronym is sometimes confused with Microsft’s unrelated Vista operating system.)

Rick Jung

Medsphere Chief Operating Office Rick Jung says the private, venture-backed company offers its version of the software, called OpenVista, on a subscription basis, which minimizes the upfront costs for hospitals and healthcare facilities. The system manages clinical and health information, laboratory tests, pharmacy, radiology, and nutrition and food service applications. In exchange, Medsphere provides OpenVista subscribers regular software updates, maintenance, and technical support. Customers also get tools that connect OpenVista to legacy systems that handle specific functions, like billing.

OpenVista also is available without a paid subscription for users to install and operate on their own enterprise networks, without support from …Next Page »

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UNDERWRITERS AND PARTNERS

Denise Gellene wrote:

Insurers spend $30 billion annually on workers compensation claims; lost productivity saps another $60 billion from the economy. San Diego-based NextImage Medical is focused on changing this picture by taking aim at a key bottleneck that adds to costs: delays associated with radiology exams.

CEO Liz Griggs says injured workers face waits of two to six weeks to get an appointment for an X-ray, MRI or CT scan, and to obtain the results—delaying diagnosis and the start of treatment. Time is money to insurers, because sidelined workers receive indemnity payments while they wait.

NextImage has developed a Web-based system for scheduling and managing diagnostic imaging services, and also has assembled a network of centers committed to reducing the delay to 24 hours. Quick turnarounds mean workers can get diagnosed and treated faster, so they can get back to their jobs more quickly. Indemnity payments are reduced.

Liz Griggs

Radiologists like the arrangement because it provides them with a steady flow of patients, Griggs says. “This is a win-win,” she says. “Radiologists like to get the business and insurers like to reduce their costs and time.”

The company, founded in 2008, has 50 employees and has received $7 million in venture funding. Koleman Karleski of Chrysalis Ventures, a key investor, said NextImage addresses a critical pressure point in the delivery of workers compensation benefits.

“Over 90 percent of claims filed result in some …Next Page »

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Denise Gellene wrote:

Somaxon Pharmaceuticals overcame two regulatory delays to win FDA approval to market its insomnia drug doxepin (Silenor). Now comes the hard part.

San Diego-based Somaxon (NASDAQ: SOMX) is entering a prescription sleeping pill market in which name-brand products have been steadily losing ground to the lower-cost generics preferred by managed care plans. So right out of the gate, doxepin will at best be the No. 2 prescription drug choice for treating insomnia, next to zolpidem, the generic version of Ambien.

That wouldn’t be so bad, except that Somaxon’s doxepin also can expect competition from over-the-counter sleep aids. Doxepin promotes sleep by acting on histamine receptors, as do Tylenol PM and Advil PM, which contain the antihistamine diphenhydramine. This means doxepin will need a competitive copay if it wants to convert regular users of OTC sleep products. Somaxon must also find a way to motivate these consumers to go see their doctors (and fork over an additional copay).

San Diego’s biotech community is well-populated with people familiar with the sleeping pill market—it wasn’t so long ago that Neurocrine Biosciences’ indiplon was supposed to be the next big sleep drug. So when I was in town recently, I took a very informal survey about doxepin’s chances for commercial success.

The local buzz is that doxepin could generate $250 million in annual sales—some optimists say $500 million is possible—but Somaxon needs to do everything right. I’m told it will be critical for the company to get its drug on managed care formularies with copays that compare favorably to the prices of OTC drugs.

Word-of-mouth also will be important because advertising is expensive and treacherous. When a generic option is available, name-brand advertising is less effective. That’s why the once-ubiquitous TV commercials depicting luminous butterflies and weird-dream talking beavers all but disappeared when generic zolpidem became available in 2007.

Somaxon talked a little bit about its commercial strategy on a conference call in mid-March right after doxepin received FDA approval. (Just one analyst posed questions on the call, which might give you a sense of Wall Street’s enthusiasm for the company.) I’m sure Somaxon watchers know all the details, but for those who don’t follow …Next Page »

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Denise Gellene wrote:

Cyntellect, a San Diego-based company working on technologies to analyze, purify and process cells, raised $3 million from the sale of debt, equity and options or warrants, according to an SEC filing. The company announced last November it had raised $15.5 million. Early investors in the 13-year-old company include Bru II Venture Capital Fund, Iceland Genomics Ventures, Sigma-Aldrich, Sumitomo, and Third Security.

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Denise Gellene wrote:

Regulatory and funding headlines dominated a light week. It’s summarized for you here.

—Torrey Pines Investment raised $30 million for a second venture fund that aims to raise a total of $150 million. The money will be used to finance acquisitions and development or co-development of drug candidates from pharmaceutical or biotech companies.

—Connect, a nonprofit group supporting technology and entrepreneurship, reported indications of life in San Diego’s innovation economy. It found 13 percent more startups were formed in 2009 than in 2008, among other encouraging signs.

—After two discouraging regulatory delays, Somaxon Pharmaceuticals (NASDAQ: SOMX) received FDA approval for its insomnia drug doxepin (Silenor).

—Tina Nova, CEO of Carlsbad, CA-based Gentopix (NASDAQ: GXDX), played to a nearly fully house at the Roth Capital Partners Growth Stock Conference in Laguna Niguel, CA. The company specializes in diagnostic services to hematologists and oncologists and was the fifteenth fastest-growing company in the North America last year according to the accounting firm Deloitte.

—Elcelyx Therapeutics raised $1.2 million of a planned $2.2 million equity offering. The company’s president is Alain D. Baron, entrepreneur in residence at Morgenthaler Ventures in Menlo Park.

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Denise Gellene wrote:

Elcelyx Therapeutics of San Diego has raised $1.2 million of a planned $2.2 million equity offering, according to an SEC filing. The document says the company’s president is Alain D. Baron, entrepreneur in residence at Morgenthaler Ventures in Menlo Park. Morgenthaler partner Ralph “Chris” Christofferson is an Elcelyx board member, according to the filing.

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Denise Gellene wrote:

Regulatory news dominated the headlines in the past week. We have it summarized for you here.

—Sequenom (NASDAQ: SQMN) said a lack of adequate controls, protocols and supervision were to blame for the mishandled data that led the company to scrub its launch of a diagnostic test for Down syndrome. Sequenom shares lost 76 percent of their value last April when the company announced that the data needed to support the test had been mishandled.

—Tomorrow is the deadline for an FDA decision on Somaxon’s (NASDAQ: SOMX) request to market its experimental insomnia drug doxepin (Silenor). The company has warned investors that approval isn’t likely.

—The FDA delayed an application from San Diego-based Amylin (NASDAQ: AMLN) and Indianapolis-based Eli Lilly to start marketing once-weekly exenatide for diabetes. The FDA’s “complete response letter” raised issues around finalizing the prescribing information that guides physicians, along with a Risk Evaluation and Mitigation Strategy (REMS) program and “clarification of existing manufacturing processes,” the companies said.

—Luke located more than 170 alums of Hybritech, the company that gave birth to San Diego’s biotechnology industry.

—San Diego-based Ligand Pharmaceuticals (NASDAQ: LGND) said today that its partner, GlaxoSmithKline, won European clearance to start marketing eltrombopag for idiopathic thrombocytopenia purpura (ITP), a rare bleeding disorder in which the immune system attacks platelet cells that help people form clots. The drug is marketed in the U.S  as Promacta.

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Denise Gellene wrote:

Acadia Pharmaceuticals of San Diego and its Canadian partner Biovail are continuing to move ahead with pimavanserin. The experimental drug, you might recall, failed last September in a trial testing it as a treatment for Parkinson’s disease-related psychosis.

Pimavanserin is Acadia’s lead drug candidate, which may help explain why Acadia (NASDAQ: ACAD) and its partner aren’t willing to give up on it.

The companies now say they expect to meet with the FDA before the end of June to discuss plans for again testing the drug in Parkinson’s disease patients with psychotic symptoms stemming from their illness. They are planning a 200-patient late-stage trial comparing pimavanserin to a placebo. The companies say they anticipate making changes to the trial design that will increase the odds of success.

Under the partnership agreement between Acadia and Biovail, Acadia will run the trial and Biovail (NYSE: BVF) will pick up the initial costs. If the trial fails, Acadia must reimburse Biovail for 50 percent of the study costs. If successful, half of the trial costs will be deducted from the milestone payment due Acadia from Biovail.

The companies also are planning a late-stage study evaluating pimavanserin alone and in combination with risperidone in 600 patients with schizophrenia. The companies anticipate the drug combination, which uses a low dose of risperidone, will have comparable efficacy but fewer side effects of a higher dose of risperidone, which is approved for schizophrenia and bipolar disorder.  Biovail is responsible for the costs and conduct of the study, which the company expects to discuss with the FDA during this quarter.

In addition, Acadia is planning an …Next Page »

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Denise Gellene wrote:

[Updated 2/26/10, 1:30 pm. See below.] The FDA has told San Diego-based Novalar to stop using a misleading patient brochure promoting the company’s injectible dental drug, phentolamine mesylate, which is intended to help dissipate the prolonged numb sensation of dental anesthetic. The brochure omits and minimizes the risks of the drug while overstating its benefits, the FDA wrote in a letter to the company.

[Updates with Novalar comment] A Novalar spokeswoman had no immediate comment. This afternoon, Novalar CEO Donna Janson says the FDA’s comments are specific to a promotional brochure that is obsolete. “It’s an earlier version that’s no longer in use,” Janson told Bruce in a call from the Chicago Dental Society Midwinter Meeting. Novalar has been consulting with the agency on the language of its current promotional materials, and Janson says, “It’s the company’s responsibility to make sure that everything that’s out there is in compliance.”

The drug, which is marketed as OraVerse, is privately-held Novalar’s only product. It is approved for reversing anesthesia of the lip and tongue after dental procedures. The drug’s active ingredient is a common vasodilator that increases the blood flow to the lips, cheeks, gum, and tongue so that the dental anesthetic wears off quicker.

Novalar, which is backed by Domain Associates, introduced the drug in six test markets almost exactly a year ago. Annual sales could reach $400 million if 20 percent of the nation’s dentists use the drug, the company has said. But as Luke reported in October, the drug has been slow to catch on. (I also asked the company earlier today for an update.)

The FDA told Novalar that the brochure is misleading because …Next Page »

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Denise Gellene wrote:

Staying in business was a challenge for La Jolla Pharmaceutical. Going out of business may be harder still.

After its lead drug candidate bombed last year in a clinical trial, La Jolla Pharmaceutical had few options. It proposed liquidation, but too few of its investors voted, so the plan failed due to lack of a quorum.

Last December, the company’s board opted to merge with Adamis Pharmaceutical, a San Diego-based company working on drugs for viral diseases. But La Jolla hasn’t been able to muster enough shareholder votes to get that plan approved either.

Time is running out.

So far, just nine percent of La Jolla’s shares have been voted. Most of these shares favor the merger, but their support isn’t enough. A majority of La Jolla shares must vote for the results to be valid.

A special meeting is scheduled today at 3 p.m. If the merger is not approved, the company will be liquidated and shareholders will receive two to three cents a share, La Jolla said in a press release.

Last December, Bruce reported that La Jolla had cash of $2.5 million to $3 million. A company spokeswoman couldn’t be reached for comment.

As previously reported, the merger would give La Jolla shareholders anywhere from 5 percent to 30 percent of the combined company, to be called Adamis Pharmaceuticals. The deal was structured as a reverse merger.

The trouble started for La Jolla Pharmaceutical a year ago, when its lead drug candidate, abetimus sodium (Riquent), failed in a clinical trial of lupus of the kidneys. An independent board of safety monitors found the company had no chance of reaching its goals of effectively treating lupus nephritis, and La Jolla said it decided to halt the study. Then it discontinued work on the drug.

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Denise Gellene wrote:

There was a smorgasbord of announcements in the last week. Get your fill here.

—Anadys Pharmaceuticals (NASDAQ: ANDS) said preliminary findings from a mid-stage trial in hepatitis C patients showed that a drug cocktail consisting of its experimental drug ANA598, interferon, and ribavirin was about as effective after 12 weeks as interferon and ribavirin alone.

—Ocera Therapeutics CEO Laurent Fischer tells Luke that the San Diego biotech should be more attractive to investors now that an FDA advisory panel has recommended approval of a rival drug from Salix Pharmaceuticals of North Carolina. The two companies are developing drugs for brain damage caused by liver failure.

—National Institutes of Health Director Francis Collins told Bruce that cancer and certain types of mental illness are diseases that appear ripe for research breakthroughs. He was in San Diego last week for the annual meeting of the American Association for the Advancement of Science.

—A new organization, the San Diego Entrepreneurs Exchange, provides information, advice and support to entrepreneurs at early-stage companies, particularly those without VC backing.

—Cooley Godward Kronish’s Venture Financing Report for the fourth quarter of 2009 concludes that while valuations remain below their historical levels, the overall trend looks promising.

—Biofuels developer Synthetic Genomics recruited a top executive from San Diego-based tools company Illumina (NASDAQ: ILMN) as its chief operating officer.

—ProActa, which is developing an anti-cancer drug, raised $1.1 million in debt and securities, according to a recent regulatory filing.

—SG Biofuels, which is a developing Jatropha as a low-cost, sustainable source of oil, announced the launch of JMax 100, a high-yield proprietary cultivar of Jatropha optimized for growing conditions in Guatemala.

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Denise Gellene wrote:

San Diego-based Cadence (NASDAQ: CADX) disclosed two weeks ago that the FDA could not approve the company’s pain reliever because of manufacturing problems, but the company didn’t provide any details. Now the FDA inspection report on the manufacturing plant has surfaced—and the details aren’t pretty.

The FDA found numerous deficiencies in the production process and discovered that one of three batches of Cadence’s intravenous acetaminophen was contaminated with a piece of nylon, three PETs (a polymer used to make bottles or clothing) and human skin. The drug is being produced for Cadence by Baxter Healthcare, a unit of Baxter (NYSE: BAX), at a factory in Cleveland, MS.

Intravenous acetaminophen is intended to be Cadence’s flagship product. Cadence licensed the drug from Bristol-Myers Squibb (NYSE: BMY), which sells intravenous acetaminophen in Europe under the name Perfalgan.

Cadence hopes to market the drug to hospitals in the U.S. as an alternative to opioid-based pain relievers, which can be habit-forming and can cause other side effects, such as constipation. Patients recovering from abdominal surgery can’t swallow the acetaminophen pills or capsules that are currently available. It should be noted that while acetaminophen isn’t addictive, it can cause liver damage.

The FDA inspection report states that Baxter must sequentially produce three acceptable batches of intravenous acetaminophen in order for the drug to receive FDA approval. So far, it seems, Baxter has failed to do so.

The report states: “The firm did not successfully produce three sequential batches for NDA submission nor did they (sic) process …Next Page »

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