Author: Luke Timmerman

Luke Timmerman wrote:

Six months after Bristol-Myers Squibb (NYSE: BMY) wrote a big check to Bothell, WA-based Alder Biopharmaceuticals, we can see what some of the fuss is about.

The first public glimpse of data from a mid-stage clinical trial of Bristol and Alder’s experimental antibody drug for rheumatoid arthritis appeared online last week. These are the results from a 124-patient clinical trial coming up next month at the European League Against Rheumatism (EULAR) conference in Barcelona. The drug’s ability to relieve signs and symptoms of rheumatoid arthritis are “outstanding” and “certainly as good” as its competitors, according to lead investigator Philip Mease of Swedish Medical Center and the University of Washington.

Before delving into the nitty gritty of the study, here’s a little background. Back in November, Bristol agreed to pay Alder as much as $1 billion over time for the right to co-develop a new antibody drug for patients with rheumatoid arthritis, called ALD518. Alder CEO Randy Schatzman said at the time that he had data from a rigorous clinical trial that said his drug was good enough to give the category-leading biotech treatment, Amgen’s etanercept (Enbrel), a “run for their money.”

The Alder drug is designed to work differently than the Amgen product. Alder is seeking to block an inflammatory protein called IL-6 that hammers the joints of rheumatoid arthritis patients, causing swelling, fatigue, and pain. The Amgen product and others like it—which make up a market worth more than $10 billion a year—work toward the same goal by hitting a different inflammatory protein called TNF. Rheumatoid arthritis is estimated to affect at least 2 million people in the U.S. in at least a mild to moderate degree. About one-third or more of patients don’t benefit at all from the TNF-blockers, and scientists don’t really know why, so there’s impetus for therapies with different ways of working. Plus, Alder’s drug can be made in a faster, cheaper, yeast-based production system that could allow it to undercut rivals on price while maintaining fat profit margins. (The Alder drug is thought to have potential for cancer as well, but that’s another story).

So this definitely matters from a business perspective, but what did scientists learn from this study? Patients with rheumatoid arthritis took methotrexate, and were randomly assigned to get either a placebo or a low, medium, or high dose of ALD518 given intravenously every eight weeks. Patients were followed for 16 weeks. Over that relatively short period of time for people with a chronic disease, the drug was considered safe. No patients suffered infections, and none had adverse immune reactions against the drug as a foreign invader. About 17 percent of ALD518 patients had increased amounts of liver enzymes showing up in their blood, which can be a sign of liver damage that the FDA keeps a close eye on.

What’s really interesting, though, is the data on effectiveness. It’s easiest to put this in a table below, but it warrants a little explanation for those unfamiliar with rheumatoid arthritis. Doctors who specialize in this condition generally want to see how many patients on a drug can see at least a 50 percent improvement in the signs and symptoms of their disease. That’s called an ACR50 score, for a standard composite measurement used by the American College of Rheumatology. There’s another measurement, called ACR70, which is for the number of patients who had at least a 70 percent improvement in the signs of symptoms of their disease.

If you look closely at the chart below, you’ll see patterns that scientists (and drug makers) really like to see. The higher the dose that patients got, the greater the chances were that they’d improve—what’s known as a dose-response relationship. And the longer patients stayed on the drug, the better they performed. The Alder drug clearly beat the placebo in every category, and the difference was statistically significant, meaning it wasn’t likely to be a fluke. At the highest dose of the Alder drug, you can see that half of all patients saw a 50 percent or greater improvement in their condition after 16 weeks.

Week 4	80 mg	160 mg	320 mg	Placebo
ACR50	9 percent	15 percent	29 percent	3 percent
ACR70	6 percent	0	11 percent	0
Week 16	80 mg	160 mg	320 mg	Placebo
ACR50	41 percent	41 percent	50 percent	15 percent
ACR70	22 percent	18 percent	43 percent	6 percent

Alder is limited in what it can say in advance of the meeting, but Schatzman said, “It’s a good start. We’re pretty enthusiastic.”

OK, but how does this compare with the gold standard biotech drug from Amgen? I must say this isn’t a totally valid comparison, because this wasn’t a head-to-head study …Next Page »

Luke Timmerman wrote:

Vertex Pharmaceuticals has been in business for more than 20 years, and burned through more than $2.8 billion on a quest to develop drugs that shake up the medical standards of care. Now in the coming weeks and months, it will get the first definitive evidence that will say whether its lead drug candidate for hepatitis C has achieved its goal.

Investors, looking at data from preliminary and mid-stage clinical trials, have already pumped up the market value of Vertex (NASDAQ: VRTX) past $7.5 billion largely in anticipation that its drug, telaprevir, will transform the lives of patients with the chronic liver-damaging condition. But the operative word there is preliminary. Vertex, which is based in Cambridge, MA, and has significant operations in San Diego, is still waiting for its first proof from Phase III clinical trials, the final step of testing required by the FDA before a drug can go on sale in the U.S.

These pivotal trials began two years ago, and enrolled more than 2,000 patients combined in three studies. The results are completely blinded to doctors, patients, investors, and people at Vertex. To say all parties are in suspense for these results would be an understatement. They can’t wait to get their hands on the new data and start digging through it.

“This is a year of defining moments,” says Bob Kauffman, Vertex’s chief medical officer.

Vertex has generated the excitement around what could be a first-in-class protease inhibitor drug for hepatitis C. It has excited researchers because it has been able to double the cure rate while enabling patients to cut their standard course of treatment time in half. That means that many more of the 3 million Americans and 170 million people worldwide with chronic hepatitis C liver infections will be likely to seek out treatment, and be able to stand up to the side effects of standard therapy that causes flu-like symptoms. If Vertex can prove this idea once and for all in the three pivotal trials, Vertex could seek FDA approval later this year and bring telaprevir to the market in 2011. U.S. sales alone could amount to more than $2 billion after a couple years, analysts say.

To help our readers get ready for this data, I spoke to Kauffman for a refresher on what the three big Vertex trials were designed to ask and answer. The key point to watch for in all of these studies is what is called a “sustained viral response,” or SVR, which is recorded when researchers can’t find any sign of virus in a patient’s blood sample for a full 24 weeks after they completed their course of therapy. This is the gold standard measurement for all hepatitis C drugs, and is commonly known as a “clinical cure.”

The first study to watch for is called “Advance.” This trial, started in March 2008, enrolled 1,050 patients who had never been treated before for hepatitis C—a so-called “naïve” patient population. This study is essentially designed to confirm earlier trials called Prove 1 and Prove 2, Kauffman says. Patients either got the Vertex drug in combination with standard treatments for 24 weeks, or the standard treatments for the usual 48 weeks. The trial is designed to ask whether patients can stop treatment early with the Vertex drug, so they can avoid having to put up with the flu-like side effects of pegylated interferon alpha and ribavirin, Kauffman says. Results from that study should be available by the end of June, he says.

Not long after that data arrives, Vertex plans to hear results from two other key trials before the end of September. One of them, called “Illuminate,” is enrolling patients who have never before …Next Page »

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Luke Timmerman wrote:

The impact of today’s FDA approval of Dendreon’s prostate cancer drug is being covered exhaustively from every angle on the Web. There’s the company saga, the benefit for prostate cancer patients, the boost to the field of cancer immunotherapy research, and the stock market surge.

But one thing that’s not lost on Dendreon CEO Mitch Gold is what this means to Seattle, the community where he lives, where the company is based, and which has lacked a powerhouse independent biotech company since Immunex got acquired by Amgen in 2002. Gold, 43, has made it plain since the day he took the Dendreon leadership job in 2002 that his aspiration is to make Dendreon the next great biotech company from Seattle.

When he took the job, I quoted him in The Seattle Times saying: “We’re not talking about building a $500 million or a $1 billion company. That’s too low,” Gold said. “We’re building something here much more durable, and much bigger.”

Eight years later, the company is now worth $6.7 billion, and Provenge is finally approved. “This is great for Seattle biotech,” Gold said this afternoon. “Now we have an anchor tenant again.”

Dendreon currently has about 650 employees, Gold says, and it is continuing to grow fast to keep up with the demand for sipuleucel-T (Provenge). The company still has more than 150 job openings on its website, with more than 60 of them at the Seattle headquarters, and most of the rest at factories in New Jersey, Georgia, and southern California.

It’s a dramatically different group of people than were at Dendreon just 12 months ago, when the company had only 200 employees, and wasn’t even sure if its drug would pass its pivotal clinical trial. But Dendreon has been transformed in this past year, raising more than $630 million from investors for the Provenge commercial push. Its stock has rocketed to more than $50 at today’s close, giving the company a market valuation of more than $6.7 billion. “Dendreon is probably now one of the top five biotech companies in the world,” Gold says, based on market value.

That sounded pretty shocking to me for a company that still hasn’t booked its first sale. By my count, Dendreon isn’t in the top 5, but it is in the top 10 now. Here’s a list of the top biopharmaceutical companies by market cap that I follow (please let me know if I’m forgetting anybody, and I’ll update below).

Company	Market cap, Apr. 29
Amgen	$56.6 billion
Gilead Sciences	$36.4 billion
Celgene	$28.3 billion
Genzyme	$14.3 billion
Biogen Idec	$14.2 billion
Vertex Pharmaceuticals	$7.9 billion
Dendreon	$6.7 billion

So how did Gold first hear the news today? Turns out he was on his way to the office in Seattle when he got a phone call from his vice president of regulatory affairs, Liz Smith, one of the mainstays at the company for years. “It was one happy moment,” Gold said.

By the time Gold had parked and made his way into the office, employees were already buzzing around the hallways and congratulating each other. The company issued its press release at 11 am, held a conference call with analysts at 11:30 am local time, and had a quick all-employee meeting in its auditorium. Gold specifically singled out Smith, and chief scientist David Urdal, for their dedication through the years of some serious ups and downs before today’s approval.

“I knew it was going to be great when this came, but I didn’t really know how great it would feel,” Gold says.

By the time I filed the first two stories today and made it to the company’s offices at 2 pm, it was quiet, except for one lonely security guard, and a single TV crew on the sidewalk. Clearly, the party had moved somewhere else. Rick Hamm, the company’s senior vice president of corporate development, told me that the sales and marketing guys were into the champagne before noon and weren’t around the office much longer.

They are certainly entitled to enjoy the moment, but everybody there knows there will be tons of work piling up on the Dendreon team almost immediately. There’s handling patients who might be unhappy they won’t be able to get Provenge. There’s the effort to keep manufacturing on track, and build out its extra capacity as fast as possible. There will be delicate negotiations with insurers to get them to pay for a $93,000 drug. Almost immediately, Wall Street will start wondering what’s next, and Dendreon will have to show investors that it’s not a one-hit wonder, and that it can plug and play other cancer drugs into its proprietary immune-boosting platform.

How long will Gold and the team actually get to celebrate? He laughed at that question, but said he’ll savor the moment tonight for sure with friends and colleagues. Then next week, he said he’ll be flying to New Jersey to see the first patient’s white blood cells roll off the factory floor in a commercial setting.

“The best moment will be when I get to see that happen,” Gold says.

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Luke Timmerman wrote:

[Updated: 12:55 pm Pacific] Dendreon’s groundbreaking new immune-booster for prostate cancer helps men live longer, and it will not be cheap. The Seattle-based biotech company (NASDAQ: DNDN) said it is planning to charge $93,000 per patient for the new drug.

The product, sipuleucel-T (Provenge) will cost $31,000 per infusion, and patients will get three infusions over a one-month period, chief operating officer Hans Bishop said today on a conference call with analysts. That price is far higher than the $62,000 average estimate that Wall Street analysts had been expecting. Dendreon stock surged more than 25 percent to over $50 after the company disclosed the price today. [Updated with stock price.]

The company made history early today when the FDA cleared sipuleucel-T (Provenge) for men with prostate cancer that has spread through the body and no longer responds to standard hormone-deprivation treatment. The drug showed in a pivotal clinical trial that patients lived a median time of 25.8 months on Provenge, compared with 21.7 months if they got a placebo. Dendreon’s pricing equation assumes that people are willing to pay about $23,000 per extra month of life, which is comparable to other cancer drugs for terminal groups of patients, Bishop said today.

Dendreon also is benchmarking its overall cost of treatment not just against competitors’ prices, but how much supportive care and hospital expenses other treatments require because they force patients to endure more side effects, Bishop said. Sanofi-Aventis’s docetaxel (Taxotere), for example, costs about $60,000 per patient when you factor in the cost of extra supportive care, and Dendreon’s drug has been shown to help people live longer.

“Our price compares favorably to other cancer drugs,” Bishop said.

Pricing is obviously a touchy issue. Set the price too low, and Dendreon might not recoup enough of the $1 billion that has been invested in the company over the past 15 years, and it could create major shortages over the next year. Set the price too high, and it runs the risk of upsetting insurers and alienating its allies in the patient advocacy community.

Dendreon isn’t equipped yet to meet all the demand it anticipates for the drug. Only about 2,000 patients will be able to get Provenge in the first 12 months that it is available, while the company relies on a single factory in New Jersey that’s operating at one-fourth of full capacity. By the middle of 2011, Dendreon hopes to have two more factories in southern California and Georgia, as well as the New Jersey plant, operating at full tilt. That should enable the company to sell about $1.2 to $2.5 billion worth of Provenge per year, CEO Mitchell Gold said.

Dealing with scarcity has been a big issue for Dendreon. It consulted doctors, patients, and medical societies for advice on what to do. In the early days, it will only allow 50 medical centers in the U.S. to fill orders for Provenge, and they are all places that have experience with the product in clinical trials. The company isn’t going to establish a waiting list—it will allow doctors to decide which patients should get the drug first. Dendreon is going to donate some undisclosed amounts of money to a nonprofit foundation which will help patients make their co-payments if they can’t afford the drug, the company said.

It will be interesting to see if insurers balk at the price, or create lots of red tape to make it hard on doctors who prescribe it. Dendreon has had some preliminary conversations with private insurers, and plans to meet with officials at the Centers for Medicare and Medicaid Services next week, Bishop said. Since prostate cancer generally afflicts older men, about three-fourths of the patients are expected to be eligible for Medicare, Bishop said.

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Luke Timmerman wrote:

[Updated: 10:15 am Pacific] Scientists have been dreaming for a century about therapies that actively harness the power of the body’s immune system to kill cancer cells like an invading virus or bacteria. Today, Seattle-based Dendreon has made history by winning the first-ever FDA approval for this kind of cancer-fighter. Shares climbed 15 percent to $45.50 after the news broke.

The good news for Dendreon (NASDAQ: DNDN) came today when it received clearance from the FDA to start selling sipuleucel-T (Provenge) to men in the U.S. with terminal prostate cancer that has spread, even after prior rounds of standard hormone-deprivation therapy, according to a statement on the FDA website. The agency gave the green light after Dendreon showed in a trial of 512 men that patients lived a median time of 25.8 months if they got Provenge, compared to 21.7 months for those on a placebo. Patients on the drug had minimal side effects of fever and chills that lasted a couple days.

The FDA’s decision will have far-reaching impact for years. The drug is the first marketed product for Dendreon, which has piled up a deficit of more than $700 million in its 18-year development quest. The product is forecasted by analysts to exceed $1 billion in U.S. sales after a couple years on the market. Dendreon could morph into the regional anchor Seattle’s biotech community has lacked since Immunex was acquired by Amgen in 2002. For the 27,000 men in the U.S. who die each year from prostate cancer, the drug represents some hope for a longer life, and a higher quality of life alternative to chemotherapy. And for researchers, it offers new possibilities for a mode of treatment beyond surgery, chemotherapy, radiation, and targeted biotech pills and antibodies that must be taken chronically.

“This is a huge advance,” said Dr. John Corman, a urologist at Virginia Mason Medical Center in Seattle, and an investigator in Provenge clinical trials for eight years. “This is the first immunotherapy agent that’s been shown to provide a survival benefit for prostate cancer patients. And it’s a completely new class of therapy that provides remarkable opportunities for R&D.”

While today’s FDA approval is groundbreaking, it’s worth being precise about what this means, and what it doesn’t. Treatments like Dendreon’s are most accurately referred to as “active immunotherapies,” although scientists sometimes loosely call them “cancer vaccines” in the media. Just to be clear, Dendreon’s product is a treatment that people get after they’ve already been diagnosed with prostate cancer, so it isn’t a vaccine in the traditional sense that prevents people from getting a disease. Because Dendreon’s treatment “teaches” the immune system to recognize certain cancer cells and fight them on its own, for months or even years, it’s considered an “active” immunotherapy. That’s also different from what researchers sometimes call “passive” immunotherapy. It’s fair to consider an intravenous-delivered antibody drug, like Roche’s rituximab (Rituxan), a “passive” immunotherapy because it works in part by stimulating the immune system to fight cancer cells, at least while the drug is active in the blood. It’s also fair to call Merck’s human papillomavirus vaccine (Gardasil) a cancer vaccine, because it prevents women from getting infected with a virus known to cause cervical cancer.

Whatever you choose to call Provenge, the anticipation of today’s FDA approval has already transformed Dendreon. A few weeks before the defining clinical trial data arrived in April 2009, the company’s stock was trading around $2, cash was running low, and it had about 200 employees. After the data arrived and was presented at a urology meeting in Chicago, Dendreon raised $630 million from investors, announced plans to grow to 600 employees, added two more drug factories, and saw its stock climb to more than $40 a share.

Plenty of questions remain about …Next Page »

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Luke Timmerman wrote:

Mirina, the microRNA drug developer at Accelerator, raised $3.9 million in its “expansion round” of financing that was reported earlier this week, according to a regulatory filing. The money ought to be enough to operate the company inside Accelerator for another 12-15 months as the company seeks to nail down more intellectual property around some advantages of its microRNA therapies, says Accelerator CEO Carl Weissman. Brian Atwood of Versant Ventures has joined the Mirina board, which also includes Weissman, Thong Le of WRF Capital, Steve Gillis of Arch Venture Partners, Chad Waite of OVP Venture Partners, Merl Hoekstra of Elitech Group, according to the filing.

Luke Timmerman wrote:

Vertex Pharmaceuticals was a pretty audacious place, even by biotech standards, when it was founded twenty years ago. It started when a senior chemist from Merck, Joshua Boger, quit that job and assembled a small band of chemists that aimed to beat the Big Pharma companies at their own game of making small-molecule drugs.

That grand ambition still hasn’t been fulfilled, but Vertex has certainly come a long way. Boger handed over the reins last year to a new CEO whose mission is to to transform Vertex into a big, stable, profitable anchor for biotech in Boston for years to come. Vertex (NASDAQ: VRTX) now has more than 1,100 employees in Massachusetts and 1,400 worldwide, a stock market capitalization of almost $8 billion, and a hepatitis C drug in the final phase of clinical trials that could become the elusive billion-dollar molecule. (The quest for such a drug was famously described in a 1994 book.)

While the early days of swagger, clashing egos, and intense late night lab sessions are in the past, quite a few people shaped by that experience have spread through Boston biotech. Many are still pursuing their own big dreams.

“Vertex attracted people who liked fresh ideas, and high-profile situations, and that weren’t afraid of risk,” says Roger Tung, an early chemist at Vertex who is now CEO of Lexington, MA-based Concert Pharmaceuticals.

Now as Vertex graduates from its development phase into a more mature, integrated commercial enterprise, it is also starting to take on some sure signs of age and experience. One of those is a growing network of alumni, like Tung, who gained valuable experience they took with them. I sought to track down many of them to get a better sense of the impact the Vertex network is having today.

The list includes 32 names at last count, and I expect it to grow over time. Thanks to Tung, Aldrich of RA Capital, Justine Koenigsberg of Concert Pharmaceuticals, and Kathryn Morris of The Yates Network for their help getting the ball rolling.

Now I’d like to ask you for some help. If you see any information below that’s out of date or incorrect, please let me know and I’ll fix it. If you are an alumnus yourself and would like to be added to the list, please send me a note or leave a comment at the bottom of the story. If you have any other questions, comments, or new information, ping me at [email protected] or [email protected].

Rich Aldrich, co-founder RA Capital Management, chairman of the board, Concert Pharmaceuticals

Eva-Lotta Allan, chief business officer, Ablynx

David Armistead, executive-in-residence, Oxford Bioscience Partners …Next Page »

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Luke Timmerman wrote:

There was quiet before the storm this week, as Dendreon is eagerly awaiting the FDA’s decision by May 1 on whether it will clear the company’s prostate cancer drug for sale. Buckle your seat belts for that one.

—Accelerator’s microRNA startup, Mirina, has made enough progress in its early days that it has secured an undisclosed “expansion” round of financing led by Versant Ventures. The company says its microRNA drugs are not just more potent than ones being developed by rivals, but they also have “unexpected properties” that should offer another advantage, once it pins down the necessary intellectual property.

—If having a famous investor syndicate were the only key to success, then Qliance Medical Management would be well on its way. The Seattle-based company, which deals directly with patients and doesn’t accept health insurance for primary care medical services, nailed down a $6 million financing from Jeff Bezos, Michael Dell, Drew Carey and others. These guys, no dummies, wrote their checks AFTER President Obama signed the health care reform bill that allows direct primary care services to compete in every state with regular insurance by 2014.

—Spiration, the Redmond, WA-based maker of devices for lung diseases, has collected another $6.5 million in debt financing from a single investor, according to a regulatory filing. Spiration raised $7 million in debt back in September from its partner, Olympus Medical Systems.

—Anybody who works in the local life sciences industry will tell you it can be hard to hold down a steady paycheck. Most drugs and devices fail in development, after all. But Chris Rivera, the president of the Washington Biotechnology & Biomedical Association, says the latest stats show 22,349 people statewide employed in life sciences work, making it the state’s fifth-biggest employer among industries.

—Speaking of WBBA, the local trade association just added a very well-known name to its team—H. Stewart Parker. The founder and longtime CEO of Targeted Genetics is taking on a new role for the WBBA as a commercialization advisor to life sciences entrepreneurs on a part-time basis.

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Luke Timmerman wrote:

H. Stewart Parker, the founder and longtime CEO of Seattle-based Targeted Genetics, has agreed to join the Washington Biotechnology & Biomedical Association as a part-time commercialization adviser to local life sciences researchers and entrepreneurs. Parker, who has inspired and mentored a generation of biotech professionals in Seattle, resigned from Targeted Genetics in November 2008 after the company suffered a number of setbacks. In a December interview, she said she was itching to return to biotech. “We are thrilled to have Stewart join us,” said WBBA president Chris Rivera, in a statement.

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Luke Timmerman wrote:

Spiration, the Redmond, WA-based maker of devices for lung disease, has raised $6.5 million in debt and options from a single investor, according to a regulatory filing. The company borrowed $7 million last September from its partner, Olympus Medical Systems. Spiration’s IBV valve device is designed to cut off air flow to diseased parts of the lung, where air gets trapped in patients with emphysema.

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Luke Timmerman wrote:

Lycera has taken an important early step in its journey of developing new treatments for autoimmune diseases. The startup, with operations in Plymouth, MI, and Cambridge, MA, has nailed down an $11 million cash infusion, which represents the second installment of a three-part, $36 million financing originally announced a year ago.

The company secured the new money from Clarus Ventures, InterWest Partners, and Arch Venture Partners, about 12 months after that crew provided $10 million and some ambitious goals to hit if the company wanted any more. Clarus’s Jeff Leiden, the former president of Abbott Laboratories, is taking on the additional role of chairman at Lycera, and the company said it has hired Robin Goldstein, a veteran of ArQule and Novartis, as part of its push through the next critical phase of preclinical testing.

Lycera, which we profiled back in January, was founded in 2006 based on research from Gary Glick’s lab at the University of Michigan. The vision is to treat autoimmune diseases, in which the immune system goes awry and attacks healthy tissue like a virus, in a new way. Rheumatoid arthritis, just one of many autoimmune conditions, already makes up an estimated $13 billion worldwide annual market for companies like Amgen, Johnson & Johnson, and Abbott. While those companies’ treatments have been a godsend for many patients, they are injectable, and they disable part of the immune system, leaving patients vulnerable to infections. Lycera hopes to improve upon this standard with oral pills that are more convenient, and by hitting novel targets on cells that can tamp down the autoimmune activity without weakening people’s natural defenses.

Over the past year, Lycera’s small team of about 15 people have shown they can create orally-delivered small-molecule compounds that were shown to be safe and effective in animal experiments involving rodents, dogs, and other species, Glick says. The company is now gearing up to do the experiments it will need to get the green light from the FDA to start clinical trials, which it expects to begin in 2011.

“These weren’t softball milestones,” Glick says. “These were significant scientific achievements. Our people worked extremely hard and really know what they are doing.”

Most of the “action” at Lycera is happening at the company’s laboratories in Plymouth, MI, near Glick’s lab at the University of Michigan, according to CEO Bill Sibold. The company has a drug discovery team there, many of whom used to work together at Pfizer before the company closed its research center there. But the company is setting up key business functions, like clinical development, regulatory affairs, business development, and executive leadership in Cambridge, to take advantage of the Boston region’s deep biotech talent pool, Sibold said when he joined the company in January.

Managing a small company in Michigan and Massachusetts hasn’t been a problem, Sibold says. It’s about a 90-minute flight, and Lycera’s office is 20 minutes from the Detroit airport. Between multiple phone calls a day, and e-mail, “we stay in touch,” Sibold says.

Lycera’s lead drug candidate is designed …Next Page »

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Luke Timmerman wrote:

Celladon has some tantalizing news today for the world of gene therapy. The San Diego-based biotech company is announcing that its experimental treatment, which delivers a gene to help people with heart failure pump blood more efficiently, has met its primary goal of showing the treatment is more effective than a placebo.

The trial enrolled 39 patients with advanced heart failure who were randomly assigned to get a single-shot infusion of Celladon’s gene therapy, called Mydicar, or a placebo. The study, called Cupid, was designed to compare the drug to placebo on a mixture of important factors, like whether patients on the drug could get out of the hospital sooner, how often they need heart transplants or implants, how far they could walk for six minutes, and how long they lived. Patients were followed for as long as a year.

Celladon isn’t revealing any details in today’s announcement about how much better its treatment performed versus placebo, so it’s impossible to say with certainty how big a deal this is. But CEO Krisztina Zsebo said her company’s drug showed a statistically significant advantage over the placebo group on the study’s primary goal. And there was no greater rate of adverse events among patients who got the gene therapy than those in the placebo. Detailed results will be presented at European Society of Cardiology’s Heart Failure Congress in Berlin on May 30, and will be published soon in a top peer-reviewed journal, Zsebo says.

“We’re very excited. This has been a long, tough program, and a lot of translational science has gone into making it a success,” Zsebo says.

If the European cardiologists agree that this is an important finding, it will be a major milestone for gene therapy and for heart failure patients. Gene therapy was hyped in the early 1990s as a cure-all for diseases that resisted conventional drug treatment. The idea is to deliver properly functioning copies of genes into cells where they can replace missing or faulty genes at the root cause of certain diseases. The field was plagued by safety concerns in the late 1990s, and many companies abandoned the field altogether. Even today, no such treatment has yet won FDA approval.

But Celladon likes its chances for a few reasons: Older gene therapy techniques used common viruses as the delivery mode to get those genes inside cells, which often failed. Celladon sought out what it thought was a better delivery tool with adeno-associated virus technology from Seattle-based Targeted Genetics, which engineered the viruses so they would be efficient without causing illness. Congestive heart failure was thought to be an ideal testing ground for gene therapy, partly because it’s a serious illness that kills 300,000 people a year, who have few treatment options other than beta-blockers and diuretics. And Celladon’s therapy can be delivered via a direct infusion into the heart, and doesn’t need to circulate effectively through the body—a distribution challenge that has tripped up other gene therapies of the past.

The Celladon program began about five or six years ago, Zsebo says. The concept was to deliver a gene called SERCA2a into heart muscle cells. Once in the heart cells, it produces an enzyme that improves the heart’s ability to pump blood.

Everything is riding on the outcome of this trial for tiny Celladon, which …Next Page »

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Luke Timmerman wrote:

Qliance Medical Management isn’t the richest startup in Seattle, but it may have the most star power behind it. The company, which deals directly with patients and doesn’t accept health insurance for primary care medical services, has nailed down another $6 million in venture capital from a group led by Amazon founder Jeff Bezos, and which included Dell Computer pioneer Michael Dell and actor Drew Carey.

Besides those three famous names, Qliance attracted more cash from its existing investors Second Avenue Partners, New Atlantic Ventures, and Clear Fir Partners. The company got started in 2006 with a $3.5 million venture round, followed by another $4 million last July, bringing the company’s total to $13.5 million since inception. Rich Barton, the founder of Expedia and co-founder of Zillow, is another one of the big names that have put money to work at Qliance.

The big idea at the company, which we first profiled in December 2008, is a simple and disruptive one to the current U.S. healthcare system. Qliance runs what it calls a “direct practice” in downtown Seattle, which doesn’t accept any health insurance and deals directly with patients. The patient hands over a credit card, and agrees to pay a $44 to $84 monthly membership fee to Qliance for unrestricted access to its primary care medical services. The model allows Qliance to avoid spending its time doing things to get insurers to pay for primary care, which frees up the doctors to spend more time with individual patients.

Routine primary care—things like women’s health exams, flu shots, X-rays—make up almost 90 percent of the medical issues that prompt people to see a doctor, Qliance says. Going through an insurer to get these routine things done is sort of like asking your car insurance provider to reimburse you for an oil change; insurance is really needed when you’ve been in a serious accident, Qliance CEO Norm Wu said last month at an Xconomy event. Once people use “direct primary care” that avoids insurance, Qliance says consumers can get a catastrophic health insurance policy to cover them in case of a serious accident, or a cancer diagnosis, that is beyond the scope of what a primary care doc can treat.

By combining the monthly fee of primary care with the secondary insurance, Qliance contends employers and patients can save as much as 50 percent on their overall health spending, and improve overall health by making it easier for people to see a primary care doc who can help them focus on prevention and wellness.

“It’s not often you come across a business model that is truly transformational and disruptive in a sector ripe for reform, but that’s how we view Qliance in health care,” said Melinda Lewison of Bezos Expeditions, in a company statement. “We see significant long-term opportunity in Qliance as it’s easily scalable to other communities and health care reform has added wind to its back with the ability to compete in the insurance exchanges.”

The Amazon connection is a pretty clear one. Nick Hanauer of Second Avenue Partners, an early and enthusiastic backer of Qliance, was one of the early investors in Amazon.

Encouraging as the financing is, Qliance has had to clear a number of legal hurdles …Next Page »

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Luke Timmerman wrote:

Writing about life sciences innovation around the country, I hear stories every day of companies that envision transforming medical standards of care through new drugs or devices. San Diego-based NuVasive is living the dream right now.

NuVasive (NASDAQ: NUVA), as its name suggests, has developed a less invasive way for surgeons to do spinal fusion surgeries. It was a bold and innovative idea when the company was founded in 1995, and when it first brought this system to the U.S. market more than five years ago. Now the leading edge is becoming mainstream as more doctors learn the procedure, and patients like basketball Hall of Famer Bill Walton share their NuVasive success stories. Not even hard questions from insurers who balked at paying the bills seem to have slowed the company’s success—or the growth of NuVasive’s shares on Wall Street.

More than 5 million Americans suffer from some form of chronic back pain, and that has created a spinal fusion surgery market worth an estimated $5.1 billion a year in the U.S. Big medical device players like Medtronic, Johnson & Johnson, and Synthes are leaders in this market with replacement disks, screws and rods that surgeons use to hold the vertebrae in place. But NuVasive has been grabbing market share, and boosting sales at a greater than 40 percent annual clip for years. The company expects to grow sales by more than 30 percent this year, on its way to estimated annual sales of as much as $500 million.

When a couple major private insurers, Aetna and UnitedHealth, publicly stated last year they wanted to see more evidence that the NuVasive system was as good as advertised, spinal surgeons and patients leapt to the company’s defense. The insurers backed off within six months and said they would go back to reimbursing the product. Walton, who suffered from excrutiating back pain for years, recently told a Union-Tribune sports columnist that “I’m getting back into the game of life,” after he had the NuVasive surgery done.

“At the end of the day, this is a higher efficacy procedure. We really have a better, faster, cheaper procedure for our patients, the people we serve,” says Michael Lambert, NuVasive’s chief financial officer.

I got an in-depth overview of the company, and the spinal market, from Lambert and Patrick Williams, the company’s vice president of finance and investor relations, when I visited their office in San Diego a couple weeks ago. What NuVasive does is really different from what its competitors have been offering surgeons and their patients.

The anatomy is quite interesting. Around age 30, people have the maximum amount of water in the intravertebral tissues, which work like shock absorbers in the spine, Lambert says. But that gradually goes downhill as we age. The space between vertebrae shrinks, nerves get pinched, and …Next Page »

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Luke Timmerman wrote:

Pharmaceutical giant Novartis has exercised its right to buy 55,223 more shares of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), Alnylam said today in a statement. The purchases, for almost $1 million, allow Novartis to maintain a 13.4 percent ownership stake in the company, Alnylam said. The two companies began collaborating on RNA interference technology in 2005, and the collaboration has been extended to last through October 2010.

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Luke Timmerman wrote:

Alkermes is usually cast on Wall Street as a supporting actor in the eagerly-anticipated debut of the once-weekly diabetes drug from Eli Lilly and Amylin Pharmaceuticals. But today, Waltham, MA-based Alkermes, stepped into the spotlight, announcing it stands to collect more cash from the drug than expected.

Alkermes (NASDAQ: ALKS) is reporting today it will capture an 8 percent royalty on sales of exenatide once-weekly (Bydureon) on the first 40 million units sold per year. Assuming Amylin and Lilly set a price for the new drug comparable to the old twice-daily injectable version of exenatide (Byetta), the royalty would apply to the first $2 billion in annual sales. That means Alkermes would rake in $160 million in royalty payments on that amount of sales, which could climb further if Lilly and Amylin set a higher per-unit price for the once-weekly drug.

This financial detail matters because it’s the first time Alkermes has publicly stated what its actual royalty rate is for exenatide once-weekly. Until today, it has told analysts they could pencil in a 7 percent royalty for the purpose of their financial models. Since none of the 10 analysts who follow the company forecast more than $2 billion in annual sales for exenatide once-weekly, this means they will need to re-do their forecasts to reflect the extra percentage point of royalties flowing to Alkermes. It might not sound like much, but at a $2 billion sales rate, that’s an extra $20 million a year in potential revenue.

Then again, if this drug enters true mega-blockbuster territory with multiple billions in annual sales, the deal is structured so Alkermes will get a smaller piece of the pie. Once the product exceeds 40 million units sold in a given year, Alkermes’ royalty rate shrinks to 5.5 percent on every unit sale above that threshold.

The news is coming out this morning partly because Alkermes is trying to generate buzz around its R&D meeting in New York, and get people to start thinking about the company as an emerging player in the “Big Biotech” class, as Alkermes CEO Richard Pops has said before. With a market valuation of about $1.3 billion, Alkermes isn’t there yet.

“We’ll be making profits from the first vial of sales,” Pops says. “If it’s a $5 billion product, we’ll make hundreds of millions per year. With no capital investment. It’s pure profit.”

This royalty deal was established back in 2005, Pops says. Alkermes was the only company capable of doing the chemistry needed to make exenatide stable and effective in the blood for a full week, allowing people to rid themselves of the need for constant blood sugar monitoring, and frequent injections. Instead of shouldering the risk for manufacturing on its own, Alkermes chose to transfer the manufacturing technology to its partners. That left Lilly and Amylin the responsibility to build the factory to mass produce the drug, and pay commercial expenses, while Alkermes took a royalty stream, Pops says. The factory, which Amylin announced it planned to build in West Chester, OH in December 2005 for $150 million, actually ended up costing about $500 million.

So while the new royalty is the thing that will send analysts back to their spreadsheets to re-calculate their price targets for Alkermes, Pops is planning to spend much of the investor summit talking about stuff in the company’s pipeline that analysts don’t place any value on whatsoever. Alkermes’ share price …Next Page »

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Luke Timmerman wrote:

Mirina, one of the intriguing startups hatched in the past couple years at Seattle-based Accelerator, has passed a key test that will allow it to live to fight another day. The developer of microRNA-based therapies has secured an undisclosed “expansion round” of financing that will allow it to operate another 12 to 15 months, according to Accelerator CEO Carl Weissman.

Versant Ventures, one of the original backers of Accelerator seven years ago, has jumped in to lead this additional round of financing for Mirina, Weissman says. Most of the usual Accelerator syndicate is joining in too—Alexandria Real Estate Equities, Arch Venture Partners, OVP Venture Partners, and WRF Capital. While this isn’t enough money for Mirina to spin out of Accelerator like some of its predecessors, Mirina will use the cash to keep testing its technology for making microRNA drugs, and it will have a chance to secure some new intellectual property around some surprising new pharmaceutical characteristics, Weissman says.

Mirina’s ability to secure cash is a reflection of how microRNA has emerged as one of the hottest concepts in biology since they were first discovered in humans about a decade ago. The idea is to create drugs that can inhibit specific stretches of RNA that regulate how networks of proteins are expressed. By hitting switches that control entire networks of proteins, scientists hope to have success against complex diseases like diabetes, cancer, and inflammation that involve activity of many genes and proteins. Hitting these networks may have more power against these complex conditions than more traditional approaches that tend to rely on specifically inhibiting a single gene or protein, scientists say.

MicroRNA still represents the bleeding edge of biological research, as no one has yet come close to FDA approval of a drug that works this way, and only one company, Denmark-based Santaris Pharma, is thought to have entered clinical trials. But a number of companies have sprouted up to take advantage of the concept, including Santaris, Carlsbad, CA-based Regulus Therapeutics, Boulder, CO-based Miragen Therapeutics, and Austin, TX-based Mirna Therapeutics.

The Accelerator’s bet on the space, Mirina, was founded in August 2008 with a license to a chemistry platform from Nanogen (now part of France’s Elitech Group) which it believes allows for more potent microRNA-inhibitors than the rest of the pack,Weissman says. Accelerator is known for keeping its startups on a short leash, insisting they hit specific milestones in their first 18 to 24 months. While Mirina hasn’t hit all of them, it has produced such compelling evidence on a couple of counts, and shown some upside surprises, that it enticed investors to keep it going. The company has shown it can make its oligonucleotide drugs, and that they are potent and specific for certain microRNA regulatory switches. Now it wants to know how well that can be applied to certain models of disease.

“This is spectacular,” Weissman says. “The chemistry has some new and unexpected properties that will differentiate it in more ways than just potency, compared with everybody else out there.”

Weissman declined to be more specific about what those characteristics are, because Mirina is in the midst of trying to secure new intellectual property around them, he says.

If Mirina’s technology is really so hot, I wondered, why isn’t it “graduating” from Accelerator …Next Page »

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Luke Timmerman wrote:

There must be a million ideas to help the many millions of obese Americans lose weight. Today, doctors will get a glimpse at a first-of-its-kind treatment from Boston-based Gelesis, where scientists have created a capsule that expands in the stomach to make people feel full and eat less.

Gelesis has said little about this idea since the company was founded with seed financing from Puretech Ventures, plus another $16 million from OrbiMed Advisors, Queensland BioCapital Funds, Puretech, and others in January 2008. Now Gelesis has results from a clinical trial of 95 people who were randomly assigned to take the company’s superabsorbent hydrogel capsules (Attiva) or a placebo. The capsules helped people feel full after meals and less hungry in between, researchers said. And, importantly, the treatment was well-tolerated. The findings were presented at the American Association of Clinical Endocrinologists annual meeting in Boston.

Anyone following the news knows that the obesity epidemic in the U.S. has gotten so big that it poses a threat to the healthcare system, and, simultaneously, represents a monster business opportunity. Health officials now say two-thirds of U.S. adults have become overweight or obese, which raises the risk for a whole raft of other conditions like diabetes, heart attacks, and depression to name a few. Doctors often advise people to eat healthier and exercise more, without much luck. A few biotech companies are racing to win FDA approval of new drugs, but Big Pharma companies have tread cautiously in this field since the fen-phen debacle of the ’90s. Gastric bypass surgery to shrink the stomach can help people, although the procedure carries significant risks.

The idea at Gelesis is to come at this problem with a completely new method. It’s essentially a way to reduce stomach volume without subjecting people to the invasiveness and potential complications of surgery.

“For the first time a group was able to overcome the enormous technical hurdles in creating a super-absorbent polymer,” said Robert Langer, the prominent bioengineering professor at MIT, in a company statement. Langer isn’t a founder of the company, although he advised Puretech Ventures on the technology before the firm seeded Gelesis in 2006. Based on today’s results, Langer added: “This opens the door for entirely new uses of polymers in medicine.”

I took a closer look at this yesterday during a conference call with three key players of Genesis. Daphne Zohar and Eric Elenko of Puretech Ventures, and the co-inventor of the technology, Alessandro Sannino, a professor of engineering at the University of Sallento in Italy, who has been working on this idea for 15 years. The company also has recruited a lot of prominent advisers with different layers of expertise. James Hill, a University of Colorado professor and past president of The Obesity Society brings obesity knowledge; Allan Geliebter, a phychologist at St. Luke’s-Roosevelt Hospital is a pioneer of the gastric balloon; Lee Kaplan of Massachusetts General Hospital Weight Center is a leading researcher in gastric bypass surgery. John LaMattina, a former president of Pfizer’s global R&D operation, has joined the Gelesis board.

You can take a look at how this technique is supposed to work by watching this animation on the Gelesis site, which lasts a little less than four minutes. But’s here the concept in a nutshell: Gelesis has developed a superabsorbent polymer from some unspecified food source. This material, about the size of a grain of sugar, is designed to swell up more than 100-fold …Next Page »

Luke Timmerman wrote:

There was more than the usual amount of carnage this week on the Seattle biotech beat.

—AVI Biopharma (NASDAQ: AVII) ousted CEO Les Hudson as part of a boardroom coup. The board installed chief financial officer David Boyle as the interim CEO, and a company spokesman says Boyle has the board’s confidence and is a candidate for the top job on a permanent basis. AVI is eagerly awaiting data this year on a novel drug for Duchenne Muscular Dystrophy, and is also developing specific RNA-based therapies for Ebola and Marburg virus.

—CombiMatrix (NASDAQ: CBMX), the Mukilteo, WA-based maker of genetic analysis instruments, said it is making a deep round of cuts at its local facility and betting the future of the company on its diagnostics unit in Irvine, CA. CEO Amit Kumar will stay at the helm until a replacement can be found sometime before the end of June.

—Seattle-based Targeted Genetics said it was eliminating three people from its board of directors as part of its ongoing efforts to conserve cash.

—Cell Therapeutics (NASDAQ: CTIC) said it is handing out pink slips to 36 workers in order to save money now that its lymphoma drug, pixantrone, has been rejected by the FDA.

—But not all the local biotech news was so grim. Seattle-based HemaQuest Pharmaceuticals said it nailed down the second half of a Series B venture capital round that totals $12 million.

—Seattle Genetics, the developer of “empowered antibodies” to fight cancer, said the Genentech unit of Roche has extended a partnership to continue using the smaller company’s antibody technology. Seattle Genetics (NASDAQ: SGEN) will get a $9.5 million payment as part of the extension.

—Mirabilis Medica, the Bothell, WA-based developer of ultrasound technology for treating uterine fibroids, has received $1 million in debt and options financing out of a round that could be worth as much as $2 million.

—We also reminded readers earlier in the week of a big event we are planning about the future opportunities in health IT on May 12. This event will bring together a stellar list of speakers, including Swedish Medical Center CEO Rod Hochman; Stephen Friend of Sage Bionetworks; Don Listwin of the Canary Foundation; and David Cerino, who oversees Microsoft’s HealthVault platform.

—I’m also happy to say Xconomy’s life sciences team just got a little bigger this week with the addition of new columnist Sylvia Pagan Westphal. Her first column raises some provocative issues about how things might be different if the world of finance were regulated to the same degree that the FDA oversees new medicines. She is based in Boston, but Sylvia’s column will discuss national issues and run regularly on the Seattle site. You can reach her at [email protected]

—Last, but not least around here, Xconomy made a little news of our own. Xconomy founder Bob Buderi announced the addition of our next new bureau, in Detroit. I will contribute occasional life sciences stories to the mix of stories that are percolating in the state of Michigan. Want to know one obvious Seattle to Michigan connection I’ve already found? Steve Gillis of Arch Venture Partners is a board observer at Lycera, a company founded by University of Michigan professor Gary Glick to treat autoimmune disease. I’m sure we’ll find more interesting connections like these over time.

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