Author: Luke Timmerman

Luke Timmerman wrote:

Dyax (NASDAQ: DYAX), the Cambridge, MA-based maker of a drug for a rare inflammatory disease, said today it has raised $51.8 million in a stock offering. The company sold 17 million shares at $3.25 apiece in a deal underwritten by Jefferies & Company and Needham & Company. Dyax plans to use the money on the commercial push for ecallantide (Kalbitor), a drug for acute attacks of hereditary angioedema.

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Luke Timmerman wrote:

The days are getting longer, spring is in the air, and hope is springing eternal for the Mariners. But a couple of Seattle biotech companies got clobbered this week.

—Seattle-based Cell Therapeutics (NASDAQ: CTIC) suffered a humiliating public beatdown this week at a long-awaited FDA advisory panel. The FDA committee voted 9-0 against the company’s application to market pixantrone for patients with non-Hodgkin’s lymphoma. FDA cancer drug boss Richard Pazdur—whose body language practically screamed that this was a waste of his time—said the company was essentially asking him to approve the drug based on “a single incomplete trial.” Cell Therapeutics isn’t saying what its fallback plan is, but one analyst suggested that after nearly 20 years, and burning through $1.4 billion of investor’s money, it may be time to shut the doors.

—Cell Therapeutics wasn’t the only cancer drug company in town to feel a kick in the ribs. Seattle-based Oncothyreon reported that its partner, Merck KGaA, has halted all clinical trials of its experimental immune-booster for cancer after a patient in an exploratory trial developed encephalitis, an inflammation of the brain. Oncothyreon (NASDAQ: ONTY) will have to wait a while to find out if the adverse event was caused by the drug or something else, but many investors didn’t want to wait for the answer: The company’s stock immediately lost more than one-fourth of its value.

—In between breaking news, we at Xconomy are getting ready for a big event we’re organizing at the University of Washington next Monday that will bring together biotechies and computer people. It’s called “What’s Your Breakthrough Idea?” Lee Hood and Nathan Myhrvold are keynoters at this event, and I took a moment to show how these two big thinkers have forged a close relationship over the years to stay on the leading edge of their respective fields.

—President Obama and Congress made history this week by enacting healthcare reform into law, but few of the analyses coming out of the other Washington have had much to say about how this will affect the business of developing innovative new drugs. Richard Gayle dove into the bill and offered up a shrewd analysis about how biotech essentially got more of what it wanted in this bill than the President himself.

—It seems like a month ago already, but I ran a wrapup piece on Seattle biotech’s marquee gathering of the year—Life Science Innovation Northwest. This piece offered a preview of coming attractions from Alder Biopharmaceuticals, Tekmira Pharmaceuticals, Acucela and other companies that don’t make the headlines all that often—yet.

—OncoGenex Pharmaceuticals (NASDAQ: OGXI), the Bothell, WA-based developer of cancer drugs, added a couple familiar names to its board of directors. Jack Goldstein, the former president of Chiron, is the new chairman, while H. Stewart Parker, the founder and longtime CEO of Seattle-based Targeted Genetics, is taking another seat on the board.

—MDRNA (NASDAQ: MRNA), offered up its fourth quarter financial report (which, by the way, is pretty darn late at this point in March). The report said that MDRNA was down to just $1.7 million in cash heading into 2010. Even though it raised $7.5 million in January, it only has enough on hand to operate “well into the second quarter of 2010.”

—Theraclone Sciences, the Seattle-based developer of antibody drugs, disclosed in a regulatory filing that it has collected another $1.5 million for its drug development programs from an undisclosed investor. Theraclone followed up that disclosure with a press release that said its Japanese partner, Zenyaku Kogyo, exercised an option to develop one of Theraclone’s antibodies in Japan for pandemic and severe seasonal flu. Theraclone said it has received $9 million so far under the collaboration, which could be worth as much as $18 million through early-stage clinical trials, and more milestones and royalties if the antibody becomes a marketed product.

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Luke Timmerman wrote:

OncoGenex Pharmaceuticals (NASDAQ: OGXI), the Bothell, WA-based developer of cancer drugs, said today it has named Jack Goldstein as its new chairman, and H. Stewart Parker as a member of its board of directors. Current board members Dwight Winstead and Michael Martino plan to step down at the company’s upcoming annual meeting on June 8. Goldstein was president and chief operating officer of Chiron when that company was acquired by Novartis in 2006, while Parker was the founder and CEO of Seattle-based Targeted Genetics until she left the company in November 2008.

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Luke Timmerman wrote:

[Updated: 5:58 pm Pacific] MDRNA (NASDAQ: MRNA), the Bothell, WA-based developer of RNA interference drugs, said today in its fourth quarter financial report that it had just $1.7 million of cash and investments left in the bank heading into 2010. That’s about half as much as the company had at the same time a year earlier. The company, which has no marketed products generating revenue, reported a net loss of about $800,000 in the fourth quarter of 2009.

[Updated: 5:58 pm, with detail on January financing] Even though MDRNA raised $7.5 million in a January financing, MDRNA said its auditing firm, KPMG, is likely to issue an opinion in the company’s annual report that raises doubt about its ability to continue as a “going concern.” MDRNA said it has enough cash to operate “well into the second quarter of 2010.”

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Luke Timmerman wrote:

RXi Pharmaceuticals (NASDAQ: RXII), the Worcester, MA-based developer of RNA interference treatments, said today it has raised $16.2 million through a stock offering. Investors have agreed to buy 2.7 million shares at $6 apiece, plus warrants to buy another 540,000 shares. The investors got a 26 percent discount on the stock, based on RXi’s closing share price yesterday of $8.11. Rodman & Renshaw acted as the exclusive placement agent on the deal.

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Luke Timmerman wrote:

Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) said today it has earned a $20 million milestone payment from Japan-based Takeda Pharmaceuticals for handing over certain RNA interference documents, materials and know-how. The payment is part of the partnership between the two companies, first formed in May 2008, which could be worth more than $1 billion over time. Alnylam is eligible to receive more milestones and royalties if Takeda translates the technology into RNAi products.

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Luke Timmerman wrote:

[Updated: 9:34 am Eastern] Bad news out of Seattle-based Oncothyreon (NASDAQ: ONTY) this morning. The company’s partner, the Merck Serono unit of Germany-based Merck KGaA, has halted clinical trials of an immune-boosting treatment for cancer after it saw an unexpected inflammation of the brain in a patient who joined an exploratory trial. Shares of Oncothyreon fell 29 percent on the news.

The FDA has placed the development program for the BLP25 liposomal vaccine (Stimuvax) on a clinical hold, which means all clinical trials of the experimental drug are on hold until researchers can determine whether it’s safe to start them up again. The suspension affects two lung cancer trials known as Start and Inspire, as well as a breast cancer study called Stride. Those are large, pivotal trials that enroll a combined 2,600 patients.

The patient in question developed encephalitis, or inflammation of the brain, in an exploratory trial of Oncothyreon’s vaccine, the company said. The study was investigating the vaccine’s mechanism of action and how it works in combination with cyclophosmide chemotherapy. The patient has multiple myeloma, a cancer of the bone marrow.

“Patient safety is of paramount importance to Merck Serono and to Oncothyreon,” said Oncothyreon CEO Bob Kirkman, in a statement. “We understand that Merck Serono is working closely with the FDA, other regulatory agencies and the patient’s physicians to evaluate the implications of this adverse reaction and to determine an appropriate course of action.”

The clinical hold is big setback for Oncothyreon, which has been on a roll the past year because of renewed enthusiasm for Stimuvax. The company renegotiated a partnership in December 2008 to shift all the development costs to Merck KGaA, while retaining a double-digit percentage royalty on sales if it becomes a marketed product. Then the big partner showed confidence in the program by starting a new 900-patient breast cancer study last June, followed by a 420-patient trial in December. Oncothyreon has also benefitted from renewed interest in treatments that stimulate the immune system to fight cancer, following the success of Seattle-based Dendreon’s treatment for prostate cancer.

While most investors are putting value on Oncothyreon for its stake in Stimuvax, it has other programs as well. The company has two cancer drugs in development, including one that is poised for mid-stage clinical trials this year, and a next-generation cancer vaccine in the works, which I discussed with Kirkman in a December interview.

[Updated, 9:34 am Eastern with stock price.] Shares of Oncothyreon fell 29 percent to $3.37 at the open of trading today. Because so much of the company’s value is tied up in Stimuvax, there are going to be a lot of questions about this serious adverse event seen in the multiple myeloma patient on the treatment. Oncothyreon plans to hold a conference call at 5 pm Eastern/2 pm Pacific to discuss its effect on the Stimuvax program.

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Luke Timmerman wrote:

It’s time to talk about survival strategy if you’re Seattle-based Cell Therapeutics. The company (NASDAQ: CTIC) suffered a humiliating public beatdown yesterday from an FDA advisory panel, which said unanimously that the company’s lymphoma drug, pixantrone, isn’t ready for the U.S. marketplace.

Even though the FDA doesn’t have to make a formal decision on this application until April 23, the agency didn’t hide its feelings about the application. FDA’s cancer drug boss, Richard Pazdur, issued a blistering critique, saying Cell Therapeutics was essentially asking for approval of pixantrone based on “a single incomplete trial.” He added that the PIX301 trial looked more like an exploratory mid-stage study than the kind of rigorous proof from a Phase III trial the FDA demands before it will approve a new cancer drug.

If the application is rejected, what’s next for Cell Therapeutics? The company, which has burned through more than $1.4 billion of investors’ money since 1991, has no marketed products and nothing else in the pipeline with a chance of generating sales anytime soon. Cell Therapeutics had a little more than $37 million in cash in the bank heading into this year, which isn’t quite enough to run the business through September, according to the company’s annual report.

“After spending $1.4 billion of shareholders’ money, maybe it’s best for Cell Therapeutics to return what’s left to shareholders and call it a day,” says David Miller, president of Seattle-based Biotech Stock Research, an independent firm that specializes in covering small public biotech companies.

There isn’t much room to maneuver. Cell Therapeutics lost about half of its stock market valuation yesterday after the FDA panel vote, so it will be much more difficult and expensive if it wants to raise new capital by selling new shares to investors. The company has a whopping 616 million shares outstanding already, valued at 47 cents apiece at yesterday’s close, giving it a market valuation of $290 million. That valuation probably isn’t sustainable for long, Miller says. He notes that the stock opened at 12 cents a share immediately after the FDA panel vote, and climbed after that, which was probably the result of derivatives traders exiting their positions in the company, rather than a valuation that’s based on the company’s cash in the bank plus its technology. When those forces return to the stock, the company’s market valuation will likely fall below $100 million, Miller says.

So, if you’re CEO James Bianco, how do you get your company out of this jam? He has shown the ability to pull an 11th hour escape once before, keeping the company alive last year when it was down to its last few weeks of cash by selling off a key asset, closing down a facility, resorting to layoffs, and raising more cash.

The company didn’t respond to an interview request yesterday, so I figured I’d try to assess Cell Therapeutics’ options by sorting through the company’s documents and previous public statements. Here’s what I gathered about its other drug candidates, largely from the company’s annual report:

—Pixantrone in Europe. The company hasn’t yet applied for approval of pixantrone in the European Union, although it has shown interest in doing so. The company plans to file the equivalent of a new drug application to market pixantrone in Europe for relapsed or aggressive forms of non-Hodgkin’s lymphoma in mid-2010, according to its annual report.

But this isn’t a quick fix. European regulators tend to take …Next Page »

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Luke Timmerman wrote:

The CEO of a Boston biotech company that crashed a little more than a year ago is getting a second chance in the antibiotic business.

Mark Leuchtenberger, 53, the former CEO of Cambridge, MA-based Targanta Therapeutics, has been hired as president, CEO, and a member of the board at New Haven, CT-based Rib-X Pharmaceuticals. The founder and CEO of Rib-X for the past decade, Susan Froshauer, is retaining the title of chief scientific officer. But her new role isn’t entirely clear, from the information I could gather. When I asked if she will work full-time, Leuchtenberger wouldn’t comment, other than to say there are still “a variety of options” being discussed about Froshauer’s role.

Rib-X (pronounced RYE-bex) will be the next antibiotic developer that Leuchtenberger will seek to transform into a commercial entity with products for sale on the market. That didn’t happen for Targanta. He took that company public in 2007 at a valuation of $210 million, but the firm stumbled a year later when the FDA shot down its application to market a new antibiotic, saying it needed new clinical trials. Targanta went through a mass layoff, and was acquired in January 2009 by The Medicines Company for $42 million, plus potential milestones if the antibiotic ever wins FDA approval.

Leuchtenberger’s new company will certainly want to learn from those hard knocks, as it prepares to enter the final phase of clinical trials and considers whether to test the IPO waters. Rib-X has raised $158 million since its founding in 2000, and has gotten to the point where it’s ready to find a Big Pharma partner to help run an ambitious 800-patient clinical trial of its lead antibiotic candidate, delafloxacin, Froshauer said in a story published last month. Rib-X also has another drug candidate, radezolid, poised for pivotal studies.

Mark Leuchtenberger

“I’m a product guy first and foremost, and as I looked at these two products I don’t think there’s an antibiotic portfolio out there that can touch it,” Leuchtenberger says.

New England biotechies know Leuchtenberger’s name quite well. Before Targanta, he was president and CEO of Therion Biologics, a cancer immunotherapy company that raised $120 million, but, like Targanta, never got across the FDA finish line with an approved drug. Earlier in his career, Leuchtenberger was a senior officer with Biogen Idec, serving as a vice president of the company’s international business. He’s currently chairman of the board at MassBio, and a director of Beth Israel Deaconess Medical Center and Wake Forest University.

Rib-X has been around a long time because of the promise of its unusual scientific approach to developing antibiotics, which I wrote about last month. The vision is to use emerging technology to get high-resolution crystal structures of components called ribosomes in bacterial cells. This is important because many different classes of antibiotics work by binding with the ribosomes. So by getting precise images, and using a proprietary computational system, Rib-X seeks to identify points where the bacteria’s ribosomes are vulnerable, and where resistance can emerge.

Biotech, of course, is a small world, and that’s how Leuchtenberger got introduced to Rib-X. The company’s executive chairman, George Milne, is a venture partner with Radius Ventures in New York, which previously invested in Targanta.

How will Leuchtenberger handle the 2-hour car or train commute …Next Page »

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Luke Timmerman wrote:

[Updated: 4:35 pm Eastern] Cell Therapeutics’ new lymphoma drug failed to win a recommendation today from a panel of cancer experts who advise the FDA. Shares of the company fell by 48 percent on the news.

The crash came after FDA’s Oncologic Drugs Advisory Committee voted 9 to 0 today against the Seattle-based company’s application to start marketing pixantrone as a treatment for patients with relapsed forms of non-Hodgkin’s lymphoma whose disease has worsened after two prior rounds of therapy. The FDA isn’t required to follow the advice of its expert advisory panels, although it often does. The agency’s deadline to complete its review of the drug is April 23.

The vote is a major setback for Cell Therapeutics (NASDAQ: CTIC). The company has no marketed products, and pixantrone represents its only chance of a candidate that could generate U.S. sales anytime soon. Cell Therapeutics had $37.8 million in cash and investments heading into this year, which isn’t enough to operate the business through the end of September.

The chair of the FDA panel, Gail Eckhardt of the University of Colorado at Denver, said the Cell Therapeutics application was “disturbing,” partly because it only enrolled 140 of the 320 patients needed to generate a statistically valid result.

“I don’t see this as a well designed or well executed study. The evidence speaks against it,” said Wyndham Wilson, a lymphoma expert at the National Cancer Institute, and a member of the panel. Wilson also made an earlier point that pixantrone is a modified member of a chemotherapy class known as anthracyclines which are already known to be active treatments that are widely used in the U.S. and Europe. Most of the patients who responded in the Cell Therapeutics trial were in less developed countries, who have fewer treatment options.

The company didn’t appear to have any more luck persuading the regulators at the FDA. The chief of the FDA’s cancer drug division, Richard Pazdur, started his presentation out this morning by emphasizing that the Cell Therapeutics application was based on a “single incomplete trial.” He pointed out that the data from the 140 patient study is comparable to what the FDA usually sees from the second of the three phases of clinical trials usually required to win approval. FDA staff suggested that the company might be better off running other trials of pixantrone in combination with other chemotherapy regimens. The panel didn’t appear to disagree with that.

“It’s an interesting agent. I’d encourage the sponsor to develop it further, but it’s way too early now,” Wilson said, as he explained his ‘No’ vote.

The company didn’t say immediately say what it plans to do next, but it did offer a statement that suggested it hasn’t given up on pixantrone.

“We continue to believe that pixantrone should be considered as a treatment option for patients with relapsed/refractory aggressive non-Hodgkin’s lymphoma. There is a significant medical need to bring safe and effective therapies to this very sick patient population,” Bianco said in a statement. “We are committed to working closely with the FDA to address the committee’s comments as quickly as we can.”

[Updated: 4:35 pm, with closing stock price.] Shares of Cell Therapeutics lost almost half their value, falling to 47 cents, at the close of trading today after the FDA panel’s recommendation.

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Luke Timmerman wrote:

[Updated: 10:05 am Eastern, 3/22/10] The chief of cancer drug reviews at the FDA, Richard Pazdur, laid out a harsh critique this morning of a new drug that Cell Therapeutics is hoping will win approval for the U.S. market.

The company’s case for pixantrone (Pixuvri) is being heard this morning in front of the Oncologic Drugs Advisory Committee meeting at a hotel in Gaithersburg, MD. Cell Therapeutics (NASDAQ: CTIC) is seeking approval for pixantrone to treat a very sick group of patients with relapsed forms of non-Hodgkin’s lymphoma that have already gotten two prior rounds of therapy.

The panel’s recommendation to the FDA is vital for Cell Therapeutics. The company has no marketed products, and pixantrone represents its only chance of a candidate that could generate U.S. sales anytime soon. Cell Therapeutics had $37.8 million in cash and investments heading into this year, which isn’t enough on its own to operate the business through the end of September. If pixantrone is approved, Cell Therapeutics officials estimate the company can start tapping into a market of about 10,000 U.S. patients each year.

The Cell Therapeutics application hinges on a 140-patient study, known as Extend or PIX301. This study randomly assigned patients to get pixantrone or the physician’s choice of another chemotherapy drug. The study’s main goal was to show the treatment could completely wipe out tumors. About 20 percent of patients on pixantrone (14 out of 70) had a “complete response” compared with 5.7 percent (4 out of 70) who did that well in the control group.

“We believe pixantrone produced a favorable benefit to risk profile,” for patients with no other options, said CEO James Bianco.

But Pazdur made it clear that the company’s application falls short of what the FDA usually wants in an application.

James Bianco

Pazdur started his talk this morning by pointing out that the Cell Therapeutics application depends on a “single incomplete trial.” That’s because PIX301/Extend was supposed to enroll 320 patients over 36 months, but was halted after 45 months went by, and only 140 patients had enrolled.

Since the company was unable to enroll the full number of patients, it needs a higher than usual degree of statistical confidence than usual to ensure the findings weren’t a fluke, Pazdur said. The statistical threshold that studies usually aim for is “p-value” of 0.05, which means there’s only a five percent chance of a finding being the result of chance. Since the Cell Therapeutics study only enrolled 44 percent of the planned patients, the p-value should be adjusted to 0.0096, meaning there’s less than a 1 percent chance of the results being due to chance, Pazdur said. On that higher bar, this Cell Therapeutics trial fell short of its threshold, Pazdur noted. The p-value of the Extend study was 0.021.

Since the study failed to reach this statistical standard for convincing proof on the its main goal, that also means that secondary goals of the study—like whether it helped patients live longer—also fall short, Pazdur said.

And Pazdur had more objections. He noted that only eight of the 140 patients enrolled at sites in the U.S., even though the company had arranged for 28 U.S. sites to enroll patients. The enrollment was poor because many patients opted for other combination treatments, simple pain relief at the end of life, or a competing drug, rituximab (Rituxan), Pazdur said. The lack of U.S. patients means there’s a question of whether the results are generalizable to a patient population in the U.S., Pazdur said. It’s important to have patients in the U.S. in the study, because they tend to get more pre-treatments, which can affect their prognosis, the FDA said.

Bianco, during the company’s presentation, said the company tried its best to speed up enrollment. It increased the number of clinical sites, hired regional firms to recruit patients, and did Web-based outreach to clinical trial investigators. “Accrual was difficult and slow,” Bianco said.

[Updated: 10:05 am Eastern] Plus, remember those 14 patients out of 70 who had their tumors completely wiped out after getting pixantrone? The FDA, in its staff presentation, said that upon further review of their tumors, 5 of those 14 responders actually had slow-growing tumors—not the fast-growing, aggressive tumors that all patients were supposed to have in the study.

Then there were some noticeable side effects which Pazdur pointed out. About 9 percent of patients quit taking the Cell Therapeutics drug after they had white blood cell depletion, while no patients in the control group quit taking their treatment for that reason, Pazdur said. Patients also had severe heart toxicity in the trial, Pazdur said.

While the FDA usually follows the advice of its panels, it isn’t required to do so. The panel is scheduled to make its recommendation by Noon Eastern time today. The FDA’s deadline to make a decision on the pixantrone application is April 23.

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Luke Timmerman wrote:

[Updated: 9:45 pm, 3/22/10] Genetics Institute stopped making biotech headlines a long time ago. But almost 15 years after it was acquired, this high-flier from the industry’s first big wave in the 1980s is still having a ripple effect on the Boston biotech scene. It was one of the key companies that recruited, inspired, and mentored a generation of young scientists and business people in Boston.

GI, as it is known, was founded in 1980 by a couple of scientists from Harvard University, Mark Ptashne and Tom Maniatis, and got going as a business the next year with the addition of Gabriel Schmergel, a former Baxter Healthcare executive, as CEO. The company developed a reputation for first-rate science along with Genentech, another industry pioneer. It grew to 600 employees and a $1 billion market valuation by 1991, before its devastating loss in a patent lawsuit with Amgen. Rather than resort to mass layoffs, GI sold a majority ownership stake to Wyeth in 1992, and was then taken over completely in December 1996. At the end of its independence, 1,200 people worked at Genetics Institute.

Many of the people who now lead emerging biotech companies in Boston—Tuan Ha-Ngoc of Aveo Pharmaceuticals, Adelene Perkins of Infinity Pharmaceuticals, and John Knopf of Acceleron Pharma, to name a few—got their start at Genetics Institute. They still rave about what an amazing experience it was, and how the things they learned there influence them today in how they run their companies.

“This is something I’m particularly proud of,” says Schmergel, reached at his home in Florida. “A whole bunch of people have spun out of there. Some have done incredibly well. And this is a tough business.”

Schmergel—an investor in Xconomy, it must be noted—says Ptashne and Maniatis deserve the credit for establishing a culture that valued top-notch science. But even though he sometimes struggled to understand all of the science himself, he made sure that everybody in the company, not just scientists, respected it. “I used to tell our business guys that you don’t have to be a scientist in biotech, but you better be science-friendly and learn as much as you can because it’s the basis of the company,” Schmergel says.

To get a sense of where the Genetics Institute family tree extends today, I’ve sought to put together a directory with links to help GI alumni connect and re-connect. I want this list to include not just mover-shaker types, but also the rank-and-file who have moved on to other places since the Wyeth takeover in December 1996. The list includes 156 names at last count, and I expect it to grow over time. I owe thanks for help with this project to Schmergel, Infinity’s Perkins, Gina Nugent of The Yates Network, and three guys from Acceleron Pharma—Bob Steininger, Matt Sherman, and Jack Morgan.

Now here’s the part where you can 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 have any questions, comments, or new information, please send me a note at [email protected] or [email protected].

Over time, I hope this story can become a richer and more valuable resource for Genetics Institute alumni. Here’s the list I’ve put together in alphabetical order, with the most updated titles and affiliations I found online.

Joan Abrams, biotechnology teacher, Cambridge Public Schools

Kate Adams, vice president of diagnostics marketing, HistoRx

Robert Adamson, retired, former vice president, Pfizer

Tim Ahern, science and regulatory consultant, Acceleron Pharma

Joel Alvarez, associate director, global regulatory operations, Shire Human Genetic Therapies

Juan Alvarez, senior director, discovery research and biologics, Alkermes [Added: 9:45 pm, 3/22/10]

Kim Archer, project manager, Novartis Institutes for Biological Research …Next Page »

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Luke Timmerman wrote:

Theraclone Sciences, the Seattle-based developer of antibody drugs, has raised another $1.5 million in equity financing, according to a regulatory filing. The new equity comes after Theraclone received $29 million in venture capital in March 2007 from Arch Venture Partners, Canaan Partners, Healthcare Ventures, Amgen Ventures, MPM Capital, and Alexandria Real Estate Equities. The company also has funding for its HIV research and development from the International AIDS Vaccine Initiative and Japan-based Zenyaku Kogyo.

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Luke Timmerman wrote:

Seattle-based Cell Therapeutics (NASDAQ: CTIC) is getting ready, one more time, for its make-or-break moment. The big East Coast snowstorm of mid-February postponed this day of reckoning a few weeks, so the company is now getting ready to make its case in front of a committee of cancer drug experts on Monday, March 22.

For those of you just tuning in to the latest chapter in the 19-year drama known as Cell Therapeutics, this panel will be a big milestone in the company’s history. Cell Therapeutics has burned through more than $1.4 billion of investors’ money since inception, and at this point, has no products currently generating cash flow. Its application to market pixantrone in the U.S. for non-Hodgkin’s lymphoma patients is vital, since it represents Cell Therapeutics’ only serious chance at generating some sales, pronto.

I wrote an in-depth preview story on February 3 about the history of this drug, and the clinical trial data underpinning it, which is still a good guide for what to expect on Monday. Since that story, the FDA staff also published their own critical take on the Cell Therapeutics drug. The staff review noted that the treatment has “substantial” side effects, and wasn’t tested in nearly as many patients as the company had originally planned.

On Monday morning, I’ll be listening to the webcast and covering it here live at Xconomy. Important as this FDA panel will be, people should keep in mind this isn’t going to be the last word on Cell Therapeutics or pixantrone. The FDA has the authority to decide whether to approve the drug for sale in the U.S., and while it usually follows the advice of its panels, it doesn’t have to. The agency’s deadline to complete its review is April 23.

What will happen to Cell Therapeutics if the committee says the drug isn’t ready for the marketplace? The stock will surely crash, in a heartbeat. But the company might be able to keep on going, at least for a while. Cell Therapeutics had $54.9 million in cash and investments on its balance sheet on September 30, and burned through about $17 million of that stash in the fourth quarter, leaving it with $37.8 million in cash and investments heading into this year. That’s not enough to run the business through the end of this September, the company said in its annual report.

So the pressure will be on, but that’s really nothing new. If history is any guide, CEO James Bianco will just find some more investors who are willing to give him some more money. To borrow a cliché from baseball, hope springs eternal in biotech.

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Luke Timmerman wrote:

The best reporters are always gathering string, as we like to say in the journalism trade. It means we gather lots of facts and observations in our notebooks, which might not be news at first glance, but can become part of a contextual mosaic that we can rely on later when news breaks. There wasn’t much in the way of big news at this year’s Life Science Innovation Northwest conference in Seattle, but I gathered a lot of string. Here are some of my observations.

—Alder Biopharmaceuticals has kept a low profile for its first five years in business, but it has vaulted to near the top of the watch list for Seattle biotech in 2010. Mark your calendars for June 16-19, for the European League Against Rheumatism (EULAR) meeting in Rome. That’s when CEO Randy Schatzman said Alder is planning to present the long-awaited data from a 120-patient study of rheumatoid arthritis patients who were randomly assigned to get the company’s ALD518 antibody drug, or a placebo. This is the study that prompted Bristol-Myers Squibb to pay $85 million upfront, plus $1 billion worth of potential milestones, to form a partnership with Alder last November.

Alder hasn’t disclosed the data, but Schatzman has said the results appear compelling enough to give the multi-billion-dollar drugs from Amgen and Abbott Laboratories a “run for their money.”

Something like 2 million people in the U.S. suffer from rheumatoid arthritis, so this is a big market. But the Alder data could also be scientifically eye-opening. ALD518 hits a different inflammatory protein, IL-6, than the one Amgen and Abbott block, called TNF. When the full data comes out, Schatzman, a scientist by training, predicts this will change how physicians look at rheumatoid arthritis. “IL-6 is the true villain during the disease process in rheumatoid arthritis,” Schatzman said.

Incidentally, at a panel discussion at Innovation Northwest, Schatzman talked about how the Bristol deal has changed the perception of his company in Big Pharma land. “The phone started ringing,” Schatzman said. “We had already talked to everybody on the planet, but when we did the deal, it said that a Big Pharma had validated us. People said, ‘Gee, there might be something real to that. Let’s check back in.’”

Randy Schatzman

Analyst Mark Monane, of Needham & Company in New York, said he was impressed by Alder. He was especially interested in the use of ALD518 for another use, cancer cachexia, in which cancer patients suffer from extreme fatigue caused by excess inflammation. Alder has shown some preliminary results that suggest its drug can help tamp down the inflammation and improve quality of life for cancer patients, which is measured by showing they can gain instead of lose weight.

“Cancer cachexia is a real problem,” Monane says. “We focus a lot on drugs that kill tumors, but not as much on actually helping the patient. This is something that can help the patient, and you can get an answer on that relatively quickly.”

—Vancouver, BC-based Tekmira Pharmaceuticals had some good news to share about its lipid-nanoparticle system for delivering RNA interference drugs. Delivery is the No. 1 challenge in this hot field of medical research, and Tekmira said this week …Next Page »

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Luke Timmerman wrote:

After three tries, Somaxon Pharmaceuticals has won FDA approval for its insomnia drug.

The San Diego-based biotech company said today it has gotten clearance to start selling doxepin (Silenor) in the U.S. for patients with short term and chronic insomnia. The news sent shares of the company (NASDAQ: SOMX) up by 60 percent to $6.20 at 1:20 pm Eastern time.

This is the first FDA-approved product for Somaxon, which was founded in 2003. Somaxon persisted after its application was turned down by the FDA in February and December 2009. The approval means that Somaxon, or whoever it might form a partnership with, will seek to differentiate the new drug from competitors like Sanofi-Aventis’ zolpidem (Ambien and Ambien CR), King Pharmaceuticals’ zaleplon (Sonata), Dainippon Sumitomo’s eszopiclone (Lunesta).

Somaxon’s drug has a different way of working than others, as I described in this feature story earlier in the week. The Somaxon product is designed to block histamine, a neurotransmitter in the brain that’s believed to help keep people awake. Clinical trials have shown that the drug can help people get a full night’s sleep including sleep into the 7th and 8th hour, the company says.

Somaxon says its market research suggests that patients often decide not to use other drugs because of the potential for abuse and dependence. Somaxon hopes to take advantage of that market desire, pointing out that there were no indications of dependence in its clinical trials that enrolled more than 1,000 patients.

The company didn’t say how much the drug will cost in its statement. The company hopes to introduce the product to the U.S. market in the second half of 2010, CEO Richard Pascoe said in a statement.

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Luke Timmerman wrote:

I was happy to meet many regular readers during a two-day frenzy of networking, reporting, and writing at the Life Sciences Innovation Northwest meeting. Sleep is now moving up the priority list, so my conference wrap up will have to wait a few more hours. But until then, here’s a recap on the last week in Seattle biotech.

—Most of Seattle’s biotech companies are in the wrong business, if you believe industry maven Steve Burrill. Seattle doesn’t have much action in diagnostics, but in the future, personalized medicine and genomic diagnostics (Dx) will become more valuable than prescription pharmaceuticals (Rx), Burrill said in his opening keynote talk at the conference. If you have a break, you can click through the whole 146-slide PowerPoint deck that Burrill zipped through in a little more than 40 minutes.

—Seattle’s biotech VC godfather, Bob Nelsen of Arch Venture Partners, offered his view on some of the hypocrisy he sees among elected officials who say they are for innovation, but then push for policies that will strangle it. You can read more here to see what he means specifically about some state tax proposals in a guest editorial he wrote earlier. But I have one question for readers to consider: If you were in office, how would you balance the budget?

—I did a quick interview with Rajiv Shah, the new administrator of the United States Agency for International Development, who was in town to talk to biotechies about how he hopes to use USAID’s purchasing power to buy some of the innovations for global health that he sees emerging in Seattle and around the world.

—One biotech startup managed to pull down some significant cash, and time it for the first morning of the conference. This was Presage Biosciences, a spinoff from the Fred Hutchinson Cancer Research Center, which raised its first $3.1 million from angel investors. The company has developed a tool that it offers to large pharmaceutical companies, which it says should be able to boost the success rate of experimental cancer drugs from 1 in 10 to about 1 in 2. If proven over time, that’s the kind of thing pharma companies might pay for to help solve their atrocious R&D productivity problem.

—We rolled out a big announcement about another event Xconomy is organizing. This one is about innovations in healthcare information technology, way beyond what you hear about electronic medical records. It’s going to be from 2 pm to 6:30 pm on May 12 at the Frye Art Museum on Seattle’s First Hill. Swedish Medical Center CEO Rod Hochman, Sage Bionetworks founder Stephen Friend, Canary Foundation founder Don Listwin, and Microsoft HealthVault’s David Cerino are among the stellar cast of speakers we have assembled to talk about how …Next Page »

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