Author: Luke Timmerman

Luke Timmerman wrote:

The story of Infinity Pharmaceuticals can be told through three people. Steve Holtzman got the company started, and raised the money for the company’s proprietary chemistry. Julian Adams brought the focus on cancer drugs. Now it’s up to Adelene Perkins to show that the company’s treatments work, and can be successfully marketed to patients.

At least this was the perspective from Perkins, the new CEO of the Cambridge, MA-based biotech company (NASDAQ: INFI). I sat down with her a few weeks ago at an investing conference in San Francisco to learn more about the situation she’s inheriting at Infinity and where she intends to steer this ship.

Perkins took the top job on Jan. 1, as Holtzman moved upstairs to executive chairman. She had clearly paid her dues before getting the corner office: Perkins was the main architect of a deal in November 2008 with Stamford, CT-based Purdue Pharma and its overseas affiliate, Mundipharma, which basically provided a whopping five years of operating cash.

But things took a turn for the worse in April, as Infinity halted a pivotal clinical trial of its lead cancer drug candidate when it was found to be more toxic at high doses than researchers had anticipated. The company’s stock is still down 28 percent from April 15, when it scrapped that trial of IPI-504. Now Perkins, the veteran dealmaker, has the job of finding a way forward, and to generate some hard clinical trial data that will rekindle enthusiasm for the company. She didn’t give me the impression it’s going to happen in a quarter or two, and it doesn’t involve anything radically different.

“You won’t see Infinity embark on an entirely new course,” Perkins says. “My signature is very much on the course we’ve taken to date.”

Perkins is a familiar face around Boston biotech, but I wanted to hear her tell the story of the path she took to get to this point as CEO of Infinity.

First off, she wasn’t necessarily destined to go into biotech. Perkins got an undergraduate degree in chemical engineering from Villanova University, then worked for a while at General Electric and got an MBA from Harvard Business School. (Interestingly, she never mentioned Harvard during our conversation, referring to it only as “business school.”)

Right out of business school, in 1985, Perkins didn’t know what she wanted to do. “My eyes had been opened to so many careers, I wondered, now where do I go?” she says. So she hedged her bets, and took a consulting job in Boston at Bain & Company, knowing that she’d get exposure to a wide range of clients and industries that would help her make up her mind. She stayed a little more than seven years, splitting her time between pharmaceutical clients, and health care providers.

“I just loved the quality of thinking that I found with my clients in the pharmaceutical space. I felt that’s where I felt at home, and inspired,” Perkins says.

By 1992, Perkins found a full-time job in the industry as one of the early pioneers—Cambridge, MA-based Genetics Institute. It was a fun time to join the biotech industry, she says, and apply a lot of that strategic thinking from business school and consulting into a new and fast changing …Next Page »

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Luke Timmerman wrote:

Seattle-based Cell Therapeutics’ experimental drug for non-Hodgkin’s lymphoma was tested in “substantially fewer” patients than planned in a pivotal clinical trial, and the data that it gathered to support its application shows the treatment has “substantial” toxicity to blood cells and the heart, according to an analysis by FDA staff posted online today. The FDA’s statements sent shares of the company down 38 percent at the opening of today’s trading.

Cell Therapeutics (NASDAQ: CTIC), in its own briefing document, said the clinical data to support the drug is “comprehensive” and that it shrank tumors without causing cumulative heart damage like other drugs in its class.

The documents appeared online in advance of the company’s big appearance before an FDA advisory panel. The meeting starts at 8 am Eastern time/5 am Pacific on Wednesday, February 10. That’s when the Oncologic Drugs Advisory Committee, a panel of cancer drug experts that advises the FDA, will gather in a suburban Washington, DC, hotel. While investors often (correctly) focus on the panel vote as an all-important indicator of whether a new drug will be approved, the FDA itself has the ultimate authority, and isn’t required to follow the committee’s advice.

The FDA’s review of pixantrone is vital for the future of Cell Therapeutics. The company, founded in 1991, has a long and controversial history of ups and downs. It currently has no marketed products, and pixantrone represents its only imminent hope of getting a revenue-generating product on the U.S. market. The drug, a modified form of an anthracycline chemotherapy, was shown to completely eliminate tumors in about 20 percent of patients, compared with 5.7 percent on a standard chemotherapy, based on a single pivotal trial. If the treatment is approved, Cell Therapeutics officials estimate the company can tap into a market of about 10,000 U.S. patients each year who are on at least their third round of treatment for aggressive non-Hodgkin’s lymphoma.

The FDA noted in its analysis that Cell Therapeutics planned to enroll 320 patients in its pivotal trial, known as PIX301 or Extend, but the study was stopped early at an unplanned point because of poor enrollment. The trial ultimately enrolled 140 patients. “A higher level of evidence is usually required” in trials that are stopped short before a final analysis, the FDA staff said.

The FDA report includes details on how many patients died in the PIX301 study. A total of 12 out of 68 (17.6 percent) who got pixantrone died from an adverse event during the trial, while five out of 67 (7.5 percent) in the comparison group died, the FDA said. A total of 25 out of 68 pixantrone patients dropped out of the study because of adverse events, and 21 of the 67 in the control group quit early, the FDA staff said. Most patients dropped out because of bone marrow suppression or toxicity to the heart, the FDA said.

The FDA is asking the panel to respond to two questions. The first question notes that the pivotal trial was halted early after less than half of the planned number of patients enrolled, and given that, the FDA wants to know if the data is strong enough to support approval. The second question is whether the benefits of the treatment outweigh the risks. We’ll find out what the panel says on Wednesday.

Shares of Cell Therapeutics fell 41 cents, or 38 percent, to 65 cents at 9:37 am Eastern time today.

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Luke Timmerman wrote:

One of the buzzwords I keep hearing is that biotech investors want companies that are “de-risked.” This is kind of amusing, because the complex nature of biology makes biotech drug development one of the riskiest investments of all. But this craving for security is positive, at least for a while, if you are San Diego-based Optimer Pharmaceuticals.

Optimer (NASDAQ:OPTR) removed a lot (if not all) of the risk from its profile Thursday when its lead drug candidate passed a second pivotal clinical trial. The company showed its antibiotic for “C.difficile” bacterial infections, in 535 patients, was roughly equal to the gold standard antibiotic at curing people, and twice as good at preventing dangerous recurrences. That finding was consistent with another study of 629 patients reported in November 2008.

Not surprisingly, Optimer’s stock climbed as much as 15 percent Friday morning , before settling down to a modest 6 percent gain, closing at $12.54 a share.

The success of this pivotal clinical study means that Optimer is racing to send in an application to the FDA for clearance to start selling its first product, fidaxomicin. Optimer plans to file the FDA application by this summer, and it hopes to get a 6-month expedited review, which should make the drug available in early 2011, CEO Michael Chang says. Another application is being prepared for Europe.

If Optimer can get through the regulatory agencies, it will be in a unique position. There is no other antibiotic in development specifically for “C.diff” infections that’s within five years of reaching the market, Chang says, while incidence of this potentially deadly bug is growing. This is sure to spark plenty of speculation about who might form a partnership with Optimer to market this drug overseas, or who might want to buy the company altogether.

Michael Chang

“We expect shares likely will continue to move higher ahead of potential lucrative partnership opportunity/take-out possibility,” said Eun Yang, an analyst with Jeffries & Co. in New York, in a note to clients on Friday. “We view regulatory risks as very low.”

When I met Chang a few weeks ago at the JP Morgan Healthcare Conference in San Francisco, he tried to pooh-pooh any speculation of an imminent partnership, or takeover. I asked him why pharma hadn’t yet written a big partnership check already, given that fidaxomicin had passed a major Phase 3 study in November 2008.

“Pharma thinks that small startup companies are desperate. So they are playing …Next Page »

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Luke Timmerman wrote:

Zafgen arrived on the Boston biotech scene about 18 months ago with blue-chip venture backing, a highly regarded scientist as CEO, and an audacious idea. The Cambridge, MA-based company was developing a powerful new weight loss drug made to work unlike any other treatment in development, by cutting off the blood supply to fat tissue.

One year later, results are in. The idea was wrong.

“That was the theory,” says CEO Tom Hughes. “It doesn’t appear to be the case.”

As it turns out, though, that’s not the end of the story. Allow me to begin at the beginning.

Zafgen first emerged in public in September 2008. That’s when Hughes joined the company after a stint as global head of cardiovascular and metabolism research at the Novartis Institutes for Biomedical Research in Cambridge. Third Rock Ventures and Atlas Ventures provided the initial backing. The idea was to build on research at Children’s Hospital Boston that found drugs which are made to block formation of blood vessels—a successful cancer-fighting strategy—might also help shrink fat tissue. It was a provocative finding from mouse experiments, partly because nobody had really tried it before. Many other drugs in development for obesity work on receptors in the brain, trying to coax the body to think it’s full and stop eating.

VCs listened with some interest because obesity is one of the biggest market opportunities in the pharmaceutical business now. An estimated two-thirds of American adults are overweight or obese, according to the Centers for Disease Control and Prevention.

One of the key things Zafgen learned over the past year, based on detailed animal experiments, was that its drug didn’t work through the mechanisms it intended. The company conducted experiments on its lead candidate and found at the tiny doses it intended to use, “we have absolutely no effect on angiogenesis,” the scientific term for formation of new blood vessels.

Tom Hughes

Neverthless, Zafgen’s scientists had some good reasons to still press forward. They didn’t really know why it was working, but that didn’t change the fact they saw profound weight loss and fat tissue shrinkage in mice and rats. The effect was strong enough that Zafgen envisioned developing the first drug powerful enough to compete with bariatric surgery.

So how might Zafgen’s molecule produce this magnitude of weight loss? Hughes says a couple of theories have emerged based on studies by the company’s collaborators, and some external research published in the past year. One idea is that in obese people, cells in their fat tissue lose their ability to release fat acids into the bloodstream, where they can be burned up as energy. Another is that ketone bodies—certain byproducts of fatty acids that get burned up as energy—get suppressed when obese people have high amounts of insulin circulating in the blood. This makes it more difficult for the body to burn energy from fat, and more likely to store it away in fat tissue, he says.

So while Zafgen’s drug, given at low doses, had no effect on blood vessels, it did show an ability to “unlock” the fat tissue so it can release fatty acids, Hughes says. The company found its drug is also stimulating production of more ketone bodies, so that when fat is released, it can be burned up …Next Page »

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Luke Timmerman wrote:

[Updated: 2/5/2010, 5:45 pm Pacific, with Infinia CEO comments.] Infinia is raising another truckload of money. The Kennewick, WA-based company, backed by Paul Allen and Vinod Khosla, has snapped up $11.5 million in new equity financing out of a round that could bring in as much as $75 million over time, according to a regulatory filing.

The financing occurred on Feb. 1, and it came from 11 investors, according to the filing. Steve Hall, a managing director at Paul Allen’s Vulcan Capital in Seattle, confirmed that Vulcan participated in this latest financing round. Infinia CEO J.D. Sitton, reached by phone late this afternoon, said the deal included one other existing investor, GLG Partners, a fund with more than $20 billion in assets under management.

Infinia, as I described in a profile back in August, is developing solar-powered engines to generate large amounts of electricity in a renewable way. The concept uses satellite dishes that capture rays of sunlight and channel them to a focal point that contains a single-piston Stirling engine, which is powered by the heat energy. Infinia had raised $84 million in venture capital at the time of that writing, and by October, it took on another $3.25 million in debt, followed by another $2.6 million a month later in equity and options. The new funding brings its total raised to date to more than $100 million, with another $63.5 million still open in the round.

“This is a big deal for us,” Sitton says. “It represents continuing support from our existing investors, and is a big step toward positioning us for a bigger round with new investors. When it’s done, it should be the last bit of private capital we need to get our product launched.”

J.D. Sitton

The Infinia vision, in the words of Sitton, is exceptionally bold. Back in August, he said Infinia had lined up $2 billion worth of orders for its solar power generation product, which it expected to start rolling out commercially before the end of September 2010. The company was still working on refining the technology when we spoke then, and Sitton acknowledged there was still execution risk in getting all the necessary suppliers in line for this commercial push.

So kind of progress has Infinia made since then? The company is still working on product development, and remains on schedule to start commercializing its system by the end of September, Sitton says. The company has focused on getting all its manufacturing suppliers—who mainly serve the automotive industry now—to go through all the design and validation steps needed to show the product is made consistently and reliably before entering mass production.

Infinia currently has six pilot projects up and running around the world, Sitton says. One is …Next Page »

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Luke Timmerman wrote:

San Diego-based Optimer Pharmaceuticals has nailed the second big trial designed to prove it has a new antibiotic for a deadly infection people can get in hospitals.

Optimer (NASDAQ: OPTR) said today that it reached its main goal of showing its experimental antibiotic, fidaxomicin, was roughly equivalent to the gold standard vancomycin drug when attempting to cure patients infected with “C.difficile” bacteria. The Optimer drug was about twice as good as vancomycin at preventing dangerous recurrences.

The findings, from a trial of 535 patients in North America and Europe, confirm what Optimer found from a previous trial of 600 patients, which was reported back in November 2008. Now that both pivotal studies are complete, Optimer plans to ship off a new drug application to the FDA by the second half of this year. If approved, fidaxomicin would be Optimer’s first marketed product, and it could represent the first new effective treatment for “C.diff” in decades. This particularly nasty bug causes severe diarrhea, the kind that can lead to severe dehydration, inflammation of the colon, hospitalization, and death.

Hospitals aren’t exactly too keen on reporting how often their patients suffer this infection, but about 30 to 40 cases were reported per 100,000 people discharged from these institutions in 2001, and that figure has climbed to about 100 cases per 100,000 discharges in 2005, according to data from the Centers for Disease Control and Prevention.

“The growing incidence of C.difficile in hospitals, long-term care facilities, and in the community, which we believe is caused in part by the use of broad-spectrum antibiotics and an aging population, create a need for new therapies,” said Sherwood Gorbach, Optimer’s chief medical officer, in a statement.

The latest trial found that 91.7 percent of patients on the Optimer drug had a clinical cure, compared with 90.6 percent on standard vancomycin. About 12.8 percent of patients on the Optimer drug had a recurrence, compared with 25.3 percent in the control group. The new drug was considered well-tolerated, Optimer said.

Shares of Optimer climbed 20 percent in after-hours trading following the announcement. Optimer plans to discuss the results in more detail with investors on a conference call at 5 pm Eastern/2 pm Pacific time.

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Luke Timmerman wrote:

Alkermes is known for making drugs stable and long-lasting in the bloodstream. Today, the Waltham, MA-based company is announcing it has invented a new way to do the same thing, but at lower cost and with fewer manufacturing hassles. There’s also the potential that the new technique could be used on more drugs, and lead to greater convenience for patients.

The company (NASDAQ: ALKS) is announcing today that it has invented a new platform, and filed a raft of patent applications, around what it calls LinkeRx technology. Alkermes intends to prove the value of this idea first with a modified version of aripiprazole, a $2 billion-a-year antipsychotic medication marketed by Bristol-Myers Squibb as Abilify. I got the rundown on what’s different about the new technology, and the business strategy behind it, during a conversation yesterday with CEO Richard Pops.

For those new to the story, Alkermes has built its company around the idea of taking existing drugs and packaging them in biodegradable polymer microspheres that last longer in the blood. This allows patients to take fewer injections, and avoid peaks and valleys of drug concentration in the blood that can come from once-daily therapies. The Alkermes technology is currently used in Johnson & Johnson’s risperidone (Risperdal Consta), a $1.4 billion annual seller, which helps schizophrenia patients stay on the meds they need, Pops says. Alkermes is also providing critical enabling technology for exenatide once-weekly, a diabetes treatment that San Diego-based Amylin Pharmaceuticals and Eli Lilly are trying to get approved by the FDA.

Richard Pops

While the microsphere technology represents Alkermes’ past and present, the new technology will be a big part of the future, Pops says.

“This is actually a big advance,” Pops says. “It’s been a glimmer in our eye for the last several years.”

This requires a little bit of background before diving in. Today, Alkermes uses an expensive, proprietary, sterile manufacturing process to encapsulate drugs with a biodegradable polymer in a microsphere. The polymer, when exposed to body temperatures, is designed to slowly dissolve and release the active drug. The finished product comes in a dry powder, which needs to be kept refrigerated so it doesn’t release the drug prematurely. It has to be mixed with a water-based solution, and shaken, before it can be injected into the patient.

“We said, ‘Let’s get rid of the polymers and see if we can re-engineer the molecule itself,” Pops says.

So Alkermes’ chemists went to work on LinkeRx. The method uses a proprietary linker and chemical tail that’s attached to an oral drug, which creates a new molecule that’s long-lasting and injectable. The newly engineered drugs don’t need to be kept in a refrigerator, and can be distributed …Next Page »

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Luke Timmerman wrote:

The Seattle biotech beat is about to get a dose of drama over the next week, as one of the oldest companies in town prepares for a make-or-break moment in suburban Washington, D.C.

—Seattle-based Cell Therapeutics (NASDAQ: CTIC]) is getting ready for a critical decision next Wednesday, when a panel of cancer drug experts will advise the FDA on whether to approve pixantrone as a new treatment for relapsed, aggressive forms of non-Hodgkin’s lymphoma. I laid out what’s at stake in this preview story.

—AVI Biopharma (NASDAQ: AVII), a company that’s even older than Cell Therapeutics but a relative newcomer to Bothell, WA, has some important, albeit early-stage, clinical trial data to look forward to later this year. This story recaps what researchers, investors, and parents will be watching for from AVI’s lead drug candidate for Duchenne Muscular Dystrophy.

—Seattle-based HemaQuest Pharmaceuticals has raised $6 million in equity financing out of a round that could be worth as much as $12.7 million, according to a regulatory filing. This company, led by former Xcyte Therapies CEO Ron Berenson, is pursuing a new treatment for sickle cell anemia.

—NanoString Technologies, the Seattle-based maker of genetic analysis instruments, has added a big name to its board. William Young, the chairman of Biogen Idec and former chairman and CEO of Monogram Biosciences, has signed on as NanoString’s executive chairman. The company is still looking for a permanent CEO to replace Perry Fell, who stepped down last March.

—My colleague in Boston, Ryan McBride, wrote a story last week about Millennium: The Takeda Oncology Company has big ideas for how to capitalize on its new partnership with Bothell, WA-based Seattle Genetics (NASDAQ: SGEN]). This week, we saw one example of the strategy in action, as the two companies started a clinical trial of brentuximab vedotin for patients with newly-diagnosed Hodgkin’s disease, beyond the smaller group of patients with relapsed forms for whom the drug was initially developed.

—Bill Gates made some big biotech news this past week in Davos, Switzerland. His namesake foundation is pledging $10 billion over the next decade to research, develop, and deliver new vaccines against global health scourges. Biotech entrepreneurs on the fundraising trail, are you listening?

—Every March, the Washington Biotechnology and Biomedical Association tries to bring in big-time national investors for a conference where they can to scope out the local life sciences scene. And every year, they struggle. This year could be different, as Steve Burrill, the biotech jack-of-all-trades, is putting his money, organizational horsepower, and Rolodex into raising the profile of this year’s event, called Life Sciences Innovation Northwest.

—We published a thoughtful guest editorial from Richard Gayle about how to create an environment where people get out of their cubbyholes and start real, meaningful scientific collaborations. Just as a reminder, the space in the Xconomist Forum is open for you, our readers, not for me. So if you have an idea, an insight, or something you want to get off your chest that you think may have some value to other members of the local innovation community, just ping Greg and I at [email protected]

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Luke Timmerman wrote:

Ironwood Pharmaceuticals showed today that an IPO market does exist for a serious biotech company without a moneymaking product on the market, but that investors’ appetite for the speculative business of drug development is modest.

The Cambridge, MA-based biotech company set its initial public offering price at $11.25—a far cry from its forecasted price range of $14 to $16. By the end of today’s trading, the initial investors had made a little money, as the stock (NASDAQ: IRWD) opened trading at $12.40 and finished the day up 3.6 percent to close at $11.65, after about 2.7 million shares changed hands. This action came on a ho-hum overall trading day, in which both the Nasdaq Composite and Nasdaq Biotechnology Indexes were basically flat.

Importantly for Ironwood, the IPO raised $188 million in new cash for operations, turned the company’s stock into a liquid asset for its employees and venture investors, and established an initial market valuation of $1.1 billion.

The Ironwood deal marks only the third time in two years that a biotech company in the product-development phase has been able to complete an IPO. Sunrise, FL-based Bioheart did it in February 2008, and flamed out soon after, while Seattle-based Omeros (NASDAQ: OMER) has lost almost 40 percent of its value since it went public in October. As I noted on Monday, Ironwood is clearly in a different category than most biotech IPO candidates, since it has a drug for a big market that has already passed two pivotal clinical trials. Still, plenty of biotech investors were hoping Ironwood could crack open the IPO window, and re-ignite the interest of general public investors in other IPO aspirants.

I have a few calls out to ask for commentary about what ripple effect the Ironwood deal may have on the rest of the biotech sector, and I may update this space later if I hear anything noteworthy.

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Luke Timmerman wrote:

NanoString Technologies, the Seattle-based developer of genetic analysis tools, said today it has named William Young as its new executive chairman. Young is the chairman of Cambridge, MA-based Biogen Idec (NASDAQ: BIIB]), and formerly was chairman and CEO of Monogram Biosciences, and chief operating officer of Genentech. NanoString is still seeking a permanent CEO to replace Perry Fell, who retains a board seat, according to a company spokeswoman.

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Luke Timmerman wrote:

Seattle Genetics (NASDAQ: SGEN) and its partner, Millennium: The Takeda Oncology Company, said today they are starting a clinical trial of the brentuximab vedotin “empowered antibody” for patients newly diagnosed with Hodgkin’s disease. The drug has been shown effective in a small study for patients with relapsed forms of Hodgkin’s, and is currently being tested in a pivotal study among that sicker patient group. The new study among newly diagnosed patients will enroll about 40 people at multiple sites in the North America. Patients will get the experimental treatment in combination with a common chemotherapy regimen.

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Luke Timmerman wrote:

Seattle-based Cell Therapeutics will find out in seven days whether it has a legitimate shot at getting a new cancer drug on the U.S. market. This company has a long and controversial history, and it is guaranteed to generate noise over the next week from stock market bulls and bears. So I figured it might be useful to gather some of the relevant facts in advance of this modern version of Roman theater, otherwise known as an FDA advisory panel.

The main event starts at 8 am Eastern time/5 am Pacific on February 10. That’s when the Oncologic Drugs Advisory Committee, a panel of cancer drug experts that advises the FDA, will gather in a suburban Washington, DC, hotel. There, they’ll hear testimony about, and likely vote on, Cell Therapeutics’ application to market pixantrone (Pixuvri) as a new therapy for patients with relapsed, aggressive forms of non-Hodgkin’s lymphoma. The FDA isn’t required to follow the public advice of its expert panels, although it usually does.

Cell Therapeutics (NASDAQ: CTIC) has survived more than one near-death experience in the past, and CEO Jim Bianco has described 2009 as a “tight-wire act.” So pretty much the whole farm is riding on this panel vote. The company, which ran down to less than a couple of weeks of cash at one point last year, doesn’t have any marketed products generating cash at the moment and nothing besides pixantrone with a legitimate shot at imminent FDA approval. Amazingly, it has burned through more than $1.4 billion of capital since its founding in 1991 without ever becoming profitable. Yet the company has been so prodigious at convincing investors to keep writing checks, and so popular with the fast-money crowd, that it now has an astonishing 574 million shares outstanding. That’s more than Celgene (NASDAQ: CELG), a profitable maker of blood cancer drugs, which has a market capitalization of $26 billion.

James Bianco

The question of little Cell Therapeutics, and whether it will ever get within hailing distance of profitability, really hinges on a single study of 140 patients that doctors review next week.

“We do expect U.S. approval,” Cell Therapeutics president Craig Phillips told investors on January 14, during a presentation at the JP Morgan Healthcare Conference in San Francisco.

Before diving into the nitty-gritty of the medical evidence, a little bit of business background is necessary. Cell Therapeutics obtained pixantrone in 2003 when it paid $236 million to acquire Italy-based Novuspharma. The drug is a modified form of an anthracycline chemotherapy. Anthracyclines are potent cell-killing agents commonly used in patients newly diagnosed with lymphomas. They can induce long-term remissions, but they also can cause heart failure if they are used more than once. Novuspharma designed pixantrone to have the cell-killing power of an anthracyline infusion, without damaging the heart.

If the treatment is approved, Cell Therapeutics officials estimate the company can tap into a market of about 10,000 U.S. patients each year who are on at least their third round of treatment for aggressive non-Hodgkin’s lymphoma. Cell Therapeutics uses Cephalon’s bendamustine (Treanda), which costs $44,000 per patient, as a comparable benchmark on price, Phillips told investors last month. Assuming Cell Therapeutics captures one-third of the patient population, pixantrone could generate …Next Page »

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Luke Timmerman wrote:

San Diego-based BrainCells Inc. surprised the field of psychiatry last August, when a clinical trial showed that it could relieve symptoms of depression with an odd combination of an anxiety drug and a common dietary supplement. Six months later, the company is in the thick of plotting the next steps to turn this into a potential commercial hit.

In its provocative study of 142 patients, BrainCells showed that a low-dose generic buspirone, an anti-anxiety med, and the dietary supplement melatonin were able to achieve “comparable” effectiveness to standard treatments, known as selective serotonin reuptake inhibitors, according to Mauricio Fava, the vice chair of psychiatry at Massachusetts General Hospital. The company has been pretty quiet since then, but I caught up with BrainCells CEO Jim Schoeneck and chief scientist Carrolee Barlow a couple weeks ago at the JP Morgan Healthcare Conference to find out more about where BrainCells is going to take this drug in the future.

The data to support the BrainCells drug is potentially a big deal both scientifically and medically. The new drug is thought to have a completely different way of working than standard meds, by stimulating the growth of new neurons in the brain, what’s known as neurogenesis. The new mode of treatment could have a big impact on mental health, because an estimated 20 million people in the U.S. suffer from depression, the standard drugs don’t work for everybody, and they can cause side effects like weight gain and sexual dysfunction. The BrainCells combination drug didn’t show any side effects like that, so it might be an important new option for millions.

“The depression data we showed has really been the big story over the past few months,” Schoeneck says.

Before anybody gets too excited, this drug isn’t going to arrive at the corner pharmacy anytime soon. BrainCells still has a lot of work to do before it can leap ahead into a pivotal trial that could win FDA clearance to start selling the drug, code-named BCI-952. The earlier trial involved separate pills containing buspirone and melatonin. That’s not really commercially practical because both drugs are cheap and commonly available as individual components, and it’s hard to make sure patients regularly comply with a two-drug regimen.

Jim Schoeneck

So BrainCells has been working on turning BCI-952 into a proprietary oral pill that would be taken once a day, before bedtime, Schoeneck says. The company is also working to make sure it has strong intellectual property around this new molecule, he says.

Once the company is confident that it has the formulation right, it will run a similar mid-stage clinical trial. Schoeneck wouldn’t say much about what this trial will look like, but it will be a rigorous study in which patients are randomly assigned to get the drug or a placebo, and doctors and patients won’t know which is which.

The data is obviously important, but the company has been explaining to a lot of its peers in the neurology world how it came up with such a surprising finding without just chalking it up to luck. That requires a bit of explanation of BrainCells’ drug discovery platform. Back in December, Barlow said she was “swarmed” when she gave a poster presentation at the American College of Neuropsychopharmacology (try saying that one five times fast).

BrainCells, as I described in this feature back in December 2008, was built on a combination of technologies from the labs of Fred “Rusty” Gage at the Salk Institute, and Rene Hen and Eric Kandel at Columbia University. The platform uses neural stem cells to create adult …Next Page »

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Luke Timmerman wrote:

BioBehavioral Diagnostics, the Westford, MA-based maker of a tool for diagnosing attention-deficit hyperactivity disorder, said today it has raised $10 million in a Series B financing. Sevin Rosen Funds and Tullis Dickerson led the round, according to the company. BioBehavioral plans to use the cash to expand its sales and marketing efforts, and do more clinical work for its Quotient ADHD System.

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Luke Timmerman wrote:

Hemaquest Pharmaceuticals, the Seattle-based company developing a new treatment for sickle cell anemia, has pocketed a $6 million equity financing, according to a regulatory filing. The financing could eventually total as much as $12.7 million.

The filing doesn’t say who participated in the deal, but it lists some familiar biotech names as members of the Hemaquest board. The directors include CEO Ron Berenson, the former top executive at Seattle-based Xcyte Therapies; Ivor Royston of San Diego-based Forward Ventures; Frederick Dotzler of De Novo Ventures in Palo Alto, CA; George Stamatoyannopoulos of the University of Washington; and Bryan Dunnivant of Lilly Ventures in Indianapolis. Hemaquest didn’t immediately respond to a request for comment this morning.

The company was founded in 2007 by scientists at UW, Boston University, and Colorado State University, and backed by Forward Ventures, De Novo Ventures, and Lilly Ventures, according to the company website. Hemaquest’s strategy is to develop “short-chain fatty acid” molecules for treating life-threatening blood disorders. It has two experimental drugs now in the middle stage of drug development—one for sickle cell anemia, and the other for viral-related blood cancers. If those trials are successful, Hemaquest says it’s possible it could enter the third and final phase of clinical trials as soon as 2011.

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Luke Timmerman wrote:

AVI Biopharma doled out an interesting little morsel of news on its muscular dystrophy drug right before Christmas that showed encouraging results in three boys. This year, the Bothell, WA-based biotech company is eagerly awaiting more meaningful follow-up data that could show it is on track with what could be the first treatment to fix the underlying molecular abnormality in boys with Duchenne Muscular Dystrophy.

I got the update on AVI’s game plan for 2010 when I met with a few senior executives, including chief financial officer David Boyle and chief medical officer Steve Shrewsbury, a couple of weeks ago in San Francisco. We talked a little bit about the company’s RNA-based treatments for hemorrhagic viruses like Ebola, as well as a new government-funded flu program. But there’s no doubt the main event this year will be what happens with the company’s treatment for Duchenne Muscular Dystrophy.

AVI Biopharma (NASDAQ: AVII) wants to be the first company to make a drug that silences a specific strand of RNA, and enables the body to produce a protein called dystrophin. This is a protein that’s essential for enabling muscles to rebuild themselves, and is lacking in boys with a birth defect known as Duchenne Muscular Dystrophy. This is a crippling disorder that affects about one out of every 3,500 boys born worldwide.

“Duchenne Muscular Dystrophy is certainly our lead program, and we think it has significant value,” Boyle says.

The AVI approach made some medical news in The Lancet last year, when the company showed that its RNA-based treatment was able to restore production of dystrophin proteins when injected directly into a foot muscle. That prompted the next step, in which AVI developed a version of the drug that could be delivered intravenously, and circulate throughout the body, where it could presumably have a much broader impact on muscles.

The first peek at data from this trial of the intravenous version came out in December. This initial slice of data was from the first nine patients who were enrolled in the four lowest dose groups. Researchers found that in three patients who got doses on the high end of that range, the molecular abnormalities dissipated. One boy was able to produce five-fold higher amounts of dystrophin. “These results suggest that we are on the right path,” said Francesco Muntoni, the trial’s lead investigator at University College London, in a statement.

I wanted to know about the next steps to watch for in the clinical development of this drug, called AVI-4658. It turns out that AVI has two major data releases planned for 2010, and both will be closely watched by parents, researchers, and shareholders.

The first release will be before the end of June. The trial, for those unfamiliar …Next Page »

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Luke Timmerman wrote:

Everybody with a financial stake in biotechnology will be watching Ironwood Pharmaceuticals this week, as it attempts to pull off the biggest initial public offering the industry has seen in years.

The Cambridge, MA-based company, which filed its original IPO prospectus on Nov. 20, is now primed to go ahead and start selling its first shares on the NASDAQ market this week under the ticker IRWD, according to Renaissance Capital. If the company and its investment bankers pull the trigger, this will be a monster deal for a biotech company still in the product development phase. Ironwood could raise as much as $306 million if it can command the high end of its forecasted price range of $14 to $16 a share, which would establish an initial market valuation of more than $1.5 billion.

Biotech has been itching for someone to come along and whet the appetite of Wall Street for new companies, so that venture capitalists and entrepreneurs can realize the big paydays they need to justify the risks of drug development. Only one biotech company in the drug development stage, Seattle-based Omeros (NASDAQ: OMER), has gone public in the past two years, and that was a dud. So if Ironwood can find demand for its shares at the high end of its range, and the stock price rises on the first couple days of trading, it could provide a lift to the entire industry, including both public and private companies, according to three veteran market watchers I spoke with on Friday.

“There is huge buzz about it, and it could be bigger than most biotech IPOs in recent memory. The whole industry is waiting with baited breath and watching how it trades,” says Bob Nelsen, managing director of Arch Venture Partners in Seattle. “There is no question they will get a good price and get out, so the big question is what happens post-IPO. If it goes out strong, the number of followers will be much larger. If it goes out weak, only a few super-high-quality deals will get through the window. My fingers are crossed.”

Then again, a couple others I spoke with said that Ironwood is clearly a different beast than the average biotech. So while it will have an impact on the sector as a whole, it won’t necessarily re-ignite the IPO market.

“It’s a great story, but it’s more of a singularity,” says Richard Pops, the CEO of Cambridge, MA-based Alkermes (NASDAQ: ALKS), a longtime market watcher with no ties to Ironwood. “There aren’t five other Ironwoods teed up behind them.”

What’s different about Ironwood? The company has an oral pill in development that has already passed two pivotal clinical trials, so much of the clinical trial risk has been removed. The product is for a potentially vast market of millions of people who suffer from chronic constipation and irritable bowel syndrome, and who don’t have good treatment options. And Ironwood already has big partners to market the drug …Next Page »

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Luke Timmerman wrote:

San Diego-based Illumina has made its second big bet in the past two years on U.K.-based Oxford Nanopore Technologies. The investment is another show of confidence in a startup that boldly promises to sequence entire human genomes far faster and cheaper than anything on the market today, possibly for as little as $1,000 per genome.

Oxford Nanopore is announcing today it has raised $28 million in venture capital (17.4 million pounds) from Lansdowne Partners, IP Group, Invesco Perpetual, new U.S. investors who aren’t being identified, and DNA sequencing giant Illumina (NASDAQ: ILMN). The new cash comes one year after Illumina agreed to invest $18 million in Oxford Nanopore and struck a partnership to sell, market, and distribute Oxford’s DNA sequencing machines when they reach the market.

Sequencing of complete individual human genomes has been one of the big ideas in biology over the past couple of years as companies are racing to make the process better, faster, and cheap enough to potentially make it a mainstay of everyday medical research. Illumina made waves last month when it said it had refined its processes enough to make it possible to sequence whole genomes for $10,000 (albeit with a machine that costs $600,000). Competitors like Carlsbad, CA-based Life Technologies, Switzerland-based Roche, Cambridge, MA-based Helicos Biosciences, and Mountain View, CA-based Complete Genomics are all racing to stake their own claims to dominance in the era of more practical, common DNA sequencing.

Oxford Nanopore is attempting to disrupt that existing order with an entirely different technology, based on what I gathered a couple weeks ago from a conversation with CEO Gordon Sanghera and Spike Willcocks, the company’s vice president of business development. I met these Brits while they were in San Francisco attending the JP Morgan Healthcare Conference.

How is Oxford Nanopore really different? The existing sequencing players use common polymerase chain reaction (PCR) techniques to amplify DNA in a biological sample. They tag the individual units of DNA with fluorescent markers. And they use sophisticated cameras to read the flow of those fluorescent tags, Sanghera says. These steps all have their disadvantages, he says. The PCR requires laborious sample preparation, the fluorescent tags add some cost per individual DNA unit, and the cameras make for expensive capital equipment. Then there’s the challenge of having computing power and the good software required to store, analyze, and visualize all the images from that sequencing.

Oxford Nanopore is taking a different tack on this problem. It doesn’t require any PCR amplification of a sample, any fluorescence, or a camera. Instead, the company’s machine runs …Next Page »

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Luke Timmerman wrote:

Allylix, the San Diego-based company that uses genetically engineered yeast to make specialty chemicals, has raised $6 million in new equity capital, according to a regulatory filing.

The document doesn’t say who invested, although it does list CEO Carolyn Fritz, Simon Barnes of Tate & Lyle Ventures in London, Stephen Block of Tech Coast Angels, Thomas Jurgensen of Catalyst Law Group, Thomas Jameson of Bluegrass Ventures, and David Kabakoff of Sofinnova Ventures as board members. Neither Kabakoff nor Allylix’s vice president of R&D, Richard Burlingame, responded immediately to a request for comment.

Allylix provides some information about what it does on its company website. The firm, founded in 2002, says it has proprietary technology to make natural products called terpenes at low cost. These compounds, made naturally by plants in small quantities, can be useful for a variety of industrial applications like making flavor and fragrance additives, bug repellants, biofuels, and pharmaceuticals. Allylix last raised capital in November 2007, when it said it secured $3.35 million in order to introduce the first three of six commercial products it had in mind at the time.

No news updates have been added to the company’s website since October 2008, when it made a cryptic announcement about signing a partnership with a leading cleantech company. That deal provided an upfront cash payment, R&D support, and potential for further milestones based on success in development. Fritz, a former Dow Chemical executive, said at the time that the partnership marked “a major milestone for us.”

Allylix was founded by Joseph Chappell of the University of Kentucky, Joseph Noel of the Salk Institute for Biological Studies, and Jurgensen, an intellectual property lawyer in San Diego, according to a 2005 statement.

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