Author: Denise Gellene

Denise Gellene wrote:

With hundreds of biotechnology companies and thousands people employed in life sciences, San Diego has a large, informal network of people with deep knowledge across a wide range of skills. The Torrey Pines mesa, among the densest biotech clusters in the world, “acts like one big biotech incubator,” says Scott Thacher, CEO of Orphagen Pharmaceuticals, a San Diego startup working to identify drug targets for a range of autoimmune diseases and metabolic conditions.

Thacher tapped into the network seven years ago when he left Allergan to launch Orphagen. Although he tried to “get something going” in Orange County, CA, where Allergan is located, Thacher found himself gravitating south to San Diego. Following one lead after another, he located equipment, lab space, skilled workers and, perhaps most important, experienced entrepreneurs willing to provide help and advice.

Now Thacher and the founders of other life sciences startups are moving to formalize and expand their networks. They have formed the San Diego Entrepreneurs Exchange, an organization focused on the needs of very early-stage startups and new entrepreneurs. Besides Thacher, who is president of the new organization, the SDEE executive team includes David Schwarz, president of Advanced Cellular Dynamics; Ruo Steensma, president of Steensma Consulting; Deborah Slee, a medicinal chemist and independent consultant; and David LaRocca, CEO of Mandala Biosciences.

Thacher sees the exchange as a place where entrepreneurs—particularly those whose companies lack VC support—can get information and advice. The organization plans to sponsor regular networking and educational events to help new entrepreneurs acquire the skills they need to get funding and build their businesses.

Thacher says the idea came to him recently when …Next Page »

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Denise Gellene wrote:

Some local biotechnology companies landed funding deals during the past week. We’ve got that and other highlights below.

—Tioga Pharmaceuticals raised $18 million in private equity to fund a late-stage clinical trial of asimadoline, its experimental drug for irritable bowel disorder.

—San Diego received $4.95 million of $225 million in stimulus funding awarded nationwide to increase educational, training, and placement services for people seeking local life sciences and health care jobs.

—The FDA told Cadence Pharmaceuticals (NASDAQ: CADX) it found production problems at the contract manufacturing plant that produces Cadence’s intravenous form of acetaminophen, a situation that must be rectified before the drug can be approved.

—Carlsbad, CA-based Verdezyne raised $9 million in an ongoing $15.2 million venture round. The industrial biotechnology company will use the funds to validate its technology for making adipic acid, a key feedstock chemical for production of nylon.

—There was some good news for a change from Sequenom (NASDAQ: SQMN), which said it launched a non-invasive fetal sex determination test.

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Denise Gellene wrote:

Tioga Pharmaceuticals, a virtual company based in San Diego with just two fulltime employees, is announcing today it has raised $18 million in private equity to fund a late-stage clinical trial of asimadoline, its experimental drug for irritable bowel disorder.

A new investor, Genesys Capital Partners of Toronto, joined current stakeholders Forward Ventures, New Leaf Venture Partners, and BB Biotech Ventures in the financing.

Tioga says in a press release that the clinical trial of 600 subjects is scheduled to begin in the U.S. next month. The study is one of two randomized, double-blind, placebo-controlled trials required for FDA approval, the company says. The trial is specifically for patients with the form of irritable bowel syndrome that causes diarrhea (D-IBS).

As I reported in last fall, Tioga acquired asimadoline from Germany-based Merck, which put the drug through early-stage trials before deciding it did not fit into Merck’s long-range plans. In return for equity in Tioga, Merck granted the startup rights to asimadoline and agreed to provide project management expertise. Taking Merck’s R&D costs into account, more than $100 million has been invested in the drug.

As a virtual company, Tioga outsources all aspects of clinical development—human trials, chemistry, and manufacturing, regulatory, legal and IP management—in a business model that reduces its financial risk by keeping overhead to a minimum as development progresses from one phase to the next. Team members are on contract and are scattered all over the country.

Tioga describes asimadoline as an oral drug that targets kappa opioid receptors found in the digestive tract. In a mid-stage trial of 596 men and women with D-IBS accompanied by at least moderate pain, asimadoline reduced pain, urgency, frequency and bloating, the company says.

Tioga Chairman and CEO Stuart Collinson, who is also a partner at San Diego’s Forward Ventures, told me last fall that the drug was a good bet because the potential market was fairly large and the only approved drug for the condition, alosetron hydrochloride (Lotronex), carries a black-box warning, the strongest possible, and may only be prescribed by physicians enrolled in a prescribing program that requires them to inform patients about the drug’s risks.

Tioga is now a step closer to learning whether its bet will pay off.

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Denise Gellene wrote:

Cadence Pharmaceuticals’ plans to market an intravenous form of acetaminophen received another regulatory setback today. The FDA told the San Diego-based company that it could not approve the drug because of manufacturing problems at a plant where the drug is made.

The company’s shares dove nearly nine percent to close at $9.46.

Cadence (NASDAQ: CADX) said that the FDA discovered the problems during an inspection of the facility on February 5. The factory is operated by a third party manufacturer, which intends to respond promptly to the FDA, Cadence said.

In a press release, Cadence said it plans to request a meeting with the FDA to make sure the manufacturing deficiencies are addressed. The FDA did not request additional studies of the drug or raise any safety or efficacy issues, Cadence said. That’s a sign the setback could be temporary.

In November, the FDA extended by three months its deadline for completing its review of Cadence’s application to market the intravenous pain reliever. The deadline was extended to give the agency time to review additional clinical pharmacology data Cadence submitted at the request of the FDA.

Cadence developed the drug for use in hospitals 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.

Cadence plans to position its drug as a safer option to opioid drugs. However, acetaminophen also carries side effects, including …Next Page »

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Denise Gellene wrote:

There was a steady flow of drug development and funding news from San Diego’s life sciences industry over the past week. Here are the highlights.

—Halozyme Therapeutics (NASDAQ: HALO) CFO Kurt Gustafson talked with me about the experimental anti-cellulite drug that company is testing in preclinical studies.

—Connect, a non-profit that supports local technology and entrepreneurship, opened a lobbying office in Washington D.C. to represent San Diego’s innovation community.

—PatientSafe Solutions, formerly IntelliDOT, a company working on technology to prevent errors in hospitals, raised $30 million in a restructuring round of funding.

—An experimental antibiotic from Optimer Pharmaceuticals (NASDAQ: OPTR) was equivalent in a clinical trial to mainstay drug vancomycin against C.difficile bacterial infections. The company expects to fil e a new drug application with the FDA later this year.

—Sequenom (NASDAQ: SQMN)) obtained rights to develop and commercialize a genetic test for late-stage, age-related macular degeneration, the leading cause of blindness in the elderly.

—NexMed (NASDAQ: NEXM) raised $2.3 million in promissory notes from two investors for general corporate purposes and to advance its transdermal drug delivery technology.

—Tragara Pharmaceuticals, a company focused on anti-tumor drugs, has raised $5 million of a targeted $10 million venture round.

—Isis Pharmaceuticals of Carlsbad, CA (NASDAQ: ISIS) and Cambridge, MA-based partner Genzyme (NASDAQ: GENZ) said an experimental drug lowered cholesterol in patients with familial hypercholesterolemia, an inherited disorder that affects 1 in 500 people. Patients in the late-stage study had higher liver enzymes but no liver dysfunction, the companies said.

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Denise Gellene wrote:

Lifevantage (OTCBB: LFVN), a San Diego-based nutraceuticals company, raised $2.6 million of a $5 million securities offering that included debt and options, warrants or other rights to acquire another security, according to a regulatory filing. The filing didn’t say how the funds would be used.

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Denise Gellene wrote:

Cellulite is the bane of women everywhere. Caused by the irregular tightening of connective fibers between the muscle and skin, cellulite mars the rump and thighs with uneven dimples and bulges, as if a layer of cottage cheese lies just below the skin. Cosmetic creams and lotions can make the skin look smoother by inducing swelling to mask the dimples, but there is no lasting solution.

In the parlance of drug discovery, that creates an unmet need and a potentially lucrative market, given the millions of dollars women spend on marginally effective remedies each year. Men are seldom affected by the cosmetic condition.

Sensing opportunity, San Diego-based Halozyme Therapeutics (NASDAQ: HALO) is working on a treatment that attacks cellulite at its source. The experimental remedy is an enzyme—recombinant human lysosomal proteinase—that digests collagen, the main protein of connective tissue.

When injected into a dimple, the enzyme “snips” the connective fibers tugging on the skin. Once the fibers are snipped, the dimple is released and the contour of the skin is smoother.

Although the enzyme isn’t ready for human tests, it has shown promise in animal studies, CFO Kurt Gustafson says. “We have the smoothest, most beautiful looking pigs you have ever seen,” he told me recently. One worry, of course, is that Halozyme’s enzyme will destroy more collagen than necessary and the skin will become flaccid as it loses its connectivity to underlying tissue. Halozyme addresses this problem by leveraging the enzyme’s inherent affinity for acidic environments.

Lysomal proteinase is normally found in lysosomes, digestive structures within cells. The pH inside lysosomes is 5-6, more acidic than …Next Page »

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Denise Gellene wrote:

Fragile X syndrome is the second leading cause of mental retardation, after Down syndrome. Caused by a defect on the X chromosome, the syndrome affects boys more frequently and severely than girls; one-third of men with Fragile X are autistic and have trouble with communication and social interaction.

There is no cure or specific medical treatment for the genetic condition—at least not yet. Drug companies large and small, spurred by recent discoveries in neuroscience, are now working on possible treatments.

Among the more intriguing companies to enter the hunt is aFraxis, a San Diego startup backed by Avalon Ventures. The company, led by Avalon partner Jay Lichter, is leveraging discoveries from the lab of Nobel laureate Susumu Tonegawa of MIT to develop a pill that might reduce or reverse the brain abnormalities and related behavioral symptoms of Fragile X.

Lichter agreed to talk with me last month about aFraxis, but missed our appointment. His assistant explained that Lichter was dealing with a company emergency; she said his schedule was so jam-packed that he couldn’t speak with me until sometime in March.

Fortunately, my colleague Luke had a conversation with Lichter in mid-December and shared some of his notes with me. So here’s what we know about aFraxis so far.

The company was formed in 2007, the same year Tonegawa’s research in Proceedings of the National Academy of Sciences (PNAS) identified a possible drug target for Fragile X. That target was PAK, an enzyme that affects the number, size and shape of connections between neurons in the brain.

In people with Fragile X, these connections-small protrusions called “spines” on the branches of neurons-are longer, thinner and more abundant than in people without the condition. When Tonegawa inhibited PAK in mice that had been genetically alerted to have the symptoms of Fragile X, the spines became …Next Page »

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Denise Gellene wrote:

San Diego’s life sciences sector had a busy week. Allow me to recap it for you.

—Working with Assay Depot, a San Diego-based online marketplace for CRO services, Bruce found 144 companies in San Diego that provide contract services to life sciences companies, providing a glimpse of what appears to be a thriving new sector. CRO stands for contract research organization.

—Zogenix, a specialty pharmaceutical company that raised $71 million last year, led Xconomy San Diego’s 2009 list of top venture financing deals. Total venture investment in San Diego startups during the fourth quarter increased over the same period in 2008, when the economy was in deep recession.

—The San Diego-based nonprofit formerly known as the Burnham Institute for Medical Research is now the Sanford-Burnham Medical Research Institute, thanks to a $50 million donation pledged by philanthropist T. Denny Sanford.

—I had an interesting chat with Kurt Gustafson, CFO of San Diego-based Halozyme Therapeutics (NASDAQ: HALO), which is developing a portfolio of products around its recombinant enzyme hyaluronidase. Separately, Roche announced plans to manufacture a device that would deliver a cancer drug reformulated with Halozyme’s enzyme.

—San Diego Xconomist Duane Roth proposes some ideas to address the funding challenge facing the innovation economy.

—Elevation Pharmaceuticals, a San Diego-based biotech co-founded by serial entrepreneur Cam Garner, raised a tranched $30 million in Series A venture funding.

—Helixis CEO Alex Dickinson told Luke the Carlsbad, CA-based startup plans to market its desktop PCR machines over the Internet. The first orders will ship in April. The technology was spun out of the Caltech laboratories of Nobel laureate David Baltimore and Axel Scherer.

—San Diego-based Somaxon submitted a revised application for its experimental sleeping pill doxepin (Silenor) to the FDA and expects a decision by March 21.

—Amylin Pharmaceuticals (NASDAQ: AMLN) CEO Dan Bradbury told Luke the company is ready and able to launch once-weekly exenatide. An FDA decision on Amylin and Eli Lilly’s application to market the drug is due March 5.

—Prometheus Laboratories, a San Diego-based specialty pharmaceutical and diagnostics company will sell Novartis’ aldesleukin (Proleukin) in the United States. Prometheus is in registration for a $100 million IPO, according to PE Hub.

—Matt Emmens, CEO Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), talked with Luke about his path to the top. The biotechnology company employs 175 in San Diego.

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Denise Gellene wrote:

Smart companies are cautious about fiddling with successful products. So I was intrigued to learn that Roche was reformulating its blockbuster breast cancer drug trastuzumab to include an enzyme from San Diego-based Halozyme Therapeutics (NASDAQ: HALO). Last week I caught up with Halozyme CFO Kurt Gustafson, who offered some insight into why companies like Roche are interested in the product.

First some background: Halozyme’s enzyme is a genetically-engineered copy of human hyaluronidase, which breaks down a gel-like substance found in cartilage and skin. This activity can speed the absorption of injectible drugs into the bloodstream or the lymph system.

Hyaluronidase from cattle or sheep has been used for decades to speed the absorption of anesthetics during cataract surgery. Roche is using Halozyme’s human hyaluronidase to develop an injectible form of trastuzumab, which is currently available only as an intravenous drug that takes about an hour to administer, often in a hospital.

Halozyme CFO Kurt Gustafson

Roche has solid business reasons for wanting to modify trastuzumab, which had global sales of nearly $5 billion in 2009. Gustafson explained that trastuzumab may soon face competition from generic knockoffs, particularly in Europe. (Currently, there is no clear path to approval for biologic generics in the U.S.) By offering trastuzumab shots that patients can use at home, Roche can eliminate the cost of administering the drug in a hospital infusion ward. This will help Roche compete against intravenous generic drugs, which carry added infusion costs.

The reformulated drug is in late-stage trials that Roche expects to complete by the end of this year.

This deal is part of Halozyme’s broader strategy for the enzyme, dubbed PH20. “We are leveraging PH20 in two ways,” Gustafson told me. “First we are licensing it to others to use with their drugs. And second, we are taking it and combining it with other drugs that have lost patents or might be losing their exclusivity.”

This allows Halozyme to make a new …Next Page »

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Denise Gellene wrote:

San Diego-based Somaxon said it submitted a revised application for its experimental sleeping pill doxepin (Silenor) to the FDA today, with a decision expected by March 21. The revised application addressed the agency’s questions about the efficacy of the drug in non-elderly adults, according to a Somaxon press release. The FDA has rejected Somaxon’s application to market doxepin twice.

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Denise Gellene wrote:

There were new developments over the past week in some big ongoing stories.

—Histogen CEO Gail Naughton told Bruce the San Diego-based biotech expects to report results from a one-year follow-up of study of its experimental baldness treatment by the end of this month. Histogen plans additional clinical studies on volunteers with male-pattern baldness—all of them in Asia. (Sorry, guys.)

— The job market in San Diego’s life sciences industry is showing signs of, well, life. Recruiter Meredith Dow of Proven Inc. told me that layoffs appear to have slowed and some biotech startups are beginning to talk about hiring. Some occupations have a brighter outlook than others, she noted.

—Illumina (NASDAQ: ILMN), the San Diego-based tools company, introduced a machine that can decode an individual’s genome for under $10,000 in a bid to establish the company’s leadership in the gene-sequencing business.

—Sequenom (NASDAQ: SQNM) agreed to pay shareholders $14 million from its insurance proceeds and issue them new shares worth a 9.95 percent stake in the company to settle a class action suit. The settlement, which requires court approval, would resolve one problem related to what the company characterized as the mishandling of data from a clinical trial involving the company’s experimental Down syndrome test.

—Crinetics Pharmaceuticals, a San Diego startup developing biosensors for drug discovery applications, signed a collaboration agreement with the Ferring Research Institute, the peptide research center established in San Diego by Ferring Pharmaceuticals.

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Denise Gellene wrote:

San Diego-based Halozyme Therapeutics (NASDAQ: HALO) received some good news today. Its partner Roche announced plans to invest $182 million in two European factories that will produce a device designed to deliver a drug formulated with Halozyme’s enzyme technology.

The Roche drug is trastuzumab (Herceptin), which is used to treat women with an aggressive form of breast cancer that overproduces a protein called HER2. The drug, which had 2009 sales of about $4.8 billion, is currently administered by infusion in a hospital.

Halozyme’s technology would allow trastuzumab to be administered by subcutaneous injection. This means patients could receive the drug in a doctor’s office or even self-administer the anti-cancer drug at home. Roche says it takes five minutes to administer an injection compared to 60 minutes for an infusion.

The reformulated trastuzumab contains Halozyme’s recombinant PH20 (Enhanze), an enzyme that temporarily breaks down hyaluronic acid, a gel-like substance found in skin and cartilage. The companies believe PH20’s ability to clear out the space-filling gel will enhance the penetration and diffusion of trastuzumab.

Roche (OTCQX: RHHBY), which is based in Basel, Switzerland, says in its announcement today that its factories would produce what it described as “patient-friendly” devices to supply clinical studies and commercialization.

A late-stage clinical study that compares injections with the experimental formulation to infusions of the original drug in 552 breast cancer patients is underway. Patients in the trial are receiving medication every three weeks for one year and will be tracked for two years after the study ends. Roche has said it expects to file for approval to sell injectible trastuzumab in the EU in 2012.

In its press release, Roche said that injectible trastuzumab would simplify patients’ lives and enable more efficient use of hospital resources. If the trial succeeds, Halyzyme’s PH20 could have a substantial impact on the treatment of cancer-and who gets paid to provide the treatment.

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Denise Gellene wrote:

Indications are that employment in San Diego’s life sciences industry appears to be stabilizing, good news after a tumultuous year in which hundreds of experienced scientists and business professionals lost their jobs.

Recruiter Meredith Dow says layoffs appear to have slowed and some startups, for the first time in months, are beginning to talk about hiring. “There is increased optimism about getting funding during the first half of this year that will allow these startups to hire additional people,” says Dow, a senior partner at the staff recruitment firm Proven Inc. in San Diego.

A recent report from BayBio, the industry group in the San Francisco area, found that the life sciences industry in California, including San Diego, came through the worst of the recession in relatively good shape. Life sciences employment was flat, according to the report, quite an accomplishment in a state that experienced massive job losses overall.

New jobless data for December is expected any day. In November, overall unemployment was at 12.3 percent in California and at 10.3 percent in San Diego County. The BayBio report didn’t analyze employment by sector or break out the numbers for San Diego.

The tight job market meant startups with positions to fill had a remarkable number of qualified candidates to choose from. “The economic situation is difficult and it is terrible if you are out of work, but from the other side of it, we are seeing a very rich pool of candidates that might not be available otherwise,” Rich Noffsinger, CEO of Anvita Health, a San Diego-based health care analytics company, told me last month.

Dow says it is clear some industry sectors in San Diego weathered last year’s funding drought better than others. For example, she says, the past year was hard on early-stage drug research. Cash-staved biotechs slashed drug discovery operations in order to finance clinical trails of their most advanced drug candidates. Large numbers of veteran scientists were let go, resulting in one of the worst employment markets Dow has ever witnessed for medicinal chemists.

“In normal times, chemists never sat on the market for more than a week or two,” she tells me. “Now, some really great analytic chemists and organic chemists have been out for work for six or seven months. That is going to be the norm, unfortunately.”

Mary Canady, a marketing consultant with Comprendia and founder of the San Diego Biotechnology Network, says the research scientists she networks with haven’t seen signs of job recovery. “I see people who are really struggling,” she says. “I can’t say things are getting better.”

The intense focus on drug develoment is benefiting other types of workers, however. People with experience in clinical development, regulatory affairs and quality assurance are in demand, says Dow, who in some cases has had to look outside San Diego to fill positions.

Hiring in the medical device sector “seems really strong right now,” Dow tells me. The regulatory path to market tends to be shorter for medical devices than for drugs.

Dow expects at best slight gains in life sciences employment in San Diego this year. Although the worst may be over, she says it will be a while before lost research jobs come back.

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Denise Gellene wrote:

The cost of sequencing a person’s genome continues to fall. Illumina this week introduced a machine that can sequence an individual’s genome for under $10,000. That is one percent of the $1 million it cost to decode a human genome three years ago.

The announcement pushes San Diego-based Illumina to the forefront in an intense race to develop faster and cheaper genome-decoding equipment. The next-cheapest technology costs five times more.

Illumina, which unveiled its HiSeq 2000 at the JP Morgan Healthcare Conference in San Francisco, clearly believes the machine will establish its leadership in the gene-sequencing category. “Other companies are talking about future products, but we’re talking about products that are going to ship next month,” CEO Jay Flatley told Forbes.

Illumina says its first customer is BGI, formerly known as the Bejing Genomics Institute, which has ordered 128 of the new gene-sequencers for its new genome center in Hong Kong. The HiSeq 2000, which can sequence two genomes simultaneously, is priced at $690,000. Flatley said during Illumina’s R&D Day presentation today that the purchase will make BGI the world’s largest genome center. In a statement issued by Illumina, BGI’s president says it is focused on using genetic analysis to enhance agriculture and food production and to develop the personal genomics field in China.

It will be interesting to see how the competition shapes up from here. Complete Genomics of Mountain View, CA, which Luke profiled in 2008, has a stated goal of sequencing individual genomes for $5,000 each. It has a different business model from Illumina. Rather than selling sequencing machines, Complete Genomics does the genome decoding in-house and sends clients the results. Last November, the company published a “proof of principle” in the journal Science that demonstrated it could sequence and analyze a person’s genome for $8,005 to $1,726.

Another competitor is Helicos Biosciences of Cambridge, MA, which announced last year that it had sequenced the genome of one of its founders for $50,000. That is about the same price Illumina set last August for its sequencing service aimed at consumers.

Cheaper sequencing will enable more researchers to examine genomes from large numbers of individuals for differences linked to health risks or disease. Some believe that the information will lead to personalized medical care, based on an individual’s genetic information. No one knows how low the cost of genome sequencing can go. But it’s probably fair to say we haven’t seen the bottom.

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