Author: Luke Timmerman

Luke Timmerman wrote:

An idea virus swept through Washington DC and state capitals around the U.S. like a pandemic last year. Every elected official in front of a microphone suddenly wanted to spur innovation. Then they started pushing policies that will greatly undermine it.

Bob Nelsen, the managing director of Arch Venture Partners, didn’t pull any punches during a panel discussion about the state of venture investing, at the Life Science Innovation Northwest conference this morning in Seattle. Politics, he said, is becoming one of the biggest threats to life sciences innovation.

Nelsen couldn’t resist diving in after Dayton Misfeldt of Bay City Capital pointed out that his fund has been avoiding venture investments in chronic cardiovascular conditions, diabetes, and obesity because even while those are some of the biggest markets in all of pharmaceuticals, the FDA has set impossibly high safety barriers because of the pressure they feel from headline-chasing members of Congress who want to score political points by casting the FDA and Big Pharma as villains.

“The diseases that cost our country the most money, the ones he just named, are ones we aren’t investing in because of FDA actions. That’s a scary thing,” Nelsen said. “Between Alzheimer’s and diabesity [diabetes and obesity], it’s estimated to amount to 40 percent of Medicare spending in 2020, those two diseases alone. That’s a problem that needs to be addressed with incentives, instead of constantly beating us up. I’d much rather have a pill for Alzheimer’s than have somebody in chronic care for 10 years.”

Carl Weissman, the CEO of Seattle-based Accelerator and a managing director with OVP Venture Partners, didn’t disagree. (Of course, Nelsen’s firm invests in Accelerator, so it would be more surprising if they disagreed.)

“I don’t see the FDA process getting any easier, more straightforward or predictable for our companies. In an era where we are preaching cost control for healthcare, it’s counterproductive to have a process that’s more expensive and less predictable to get new healthcare treatments on the market,” Weissman said.

Nelsen was quick to add that he doesn’t consider the civil servants at FDA to be the root of the problem. He didn’t cite any examples, but type Tysabri or Avandia into Google and you’ll get an idea of the enormous pressure that’s put on the FDA when a mass-marketed drug causes problems for even a few individuals.

“It’s less of a White House driven problem than a Congressional problem,” Nelsen said. “You see Senators from both sides of the aisle that are overly concerned about safety.” By putting all the emphasis on extreme safety, this is causing investment capital and entrepreneurs to ignore the biggest health challenges of the world. Nelsen didn’t call those Senators out by name, but he let them have it anyway.

“They are not really caring at all about sick people who are dying. At some time there will be a sea change. I can see a wave of people in this country who will get fed up with it,” Nelsen said. “It’s one of the biggest risks to killing this industry—the FDA shutting us down.” He added: “People in the FDA …Next Page »

Luke Timmerman wrote:

Acucela and its partner, Japan-based Otsuka Pharmaceutical, said today they have received “Fast Track” designation for an application to market a new drug for the “dry” form of age-related macular degeneration. The designation means that the companies will  be able to file data on their drug,  ACU-4429, as it becomes available, and which makes it possible for the companies to get a faster-than-usual six-month review that is sometimes given to applications to treat serious or life-threatening conditions.

Luke Timmerman wrote:

The guy whose job is to make sure the U.S. is the world’s leading humanitarian showed up yesterday in Seattle to talk to a bunch of venture capitalists and biotech entrepreneurs.

If that sounds odd, it should. But this is Seattle, home of the Bill & Melinda Gates Foundation and a cluster of hard-charging social entrepreneurs in global health, and the speaker was Rajiv Shah. He’s a 37-year-old with a medical degree, and seven years of experience at the Gates Foundation. Shah now runs the United States Agency for International Development (USAID).

With a job like that, his main concern is to get enough food and water into a disaster zone like Haiti. But at the Life Science Innovation Northwest conference, he gave a luncheon keynote talk in which he insisted he wants to use some of the money (a $54 billion budget request in fiscal 2010) and manpower (staff of 8,000) at his command to form the kind of public-private partnerships that his former employer thinks provide the focus needed to get new drugs, diagnostics, and vaccines out in the field and actually helping people in poor countries.

It sounds good, but as anyone who has applied for a federal grant knows all too well, there’s more than a little red tape involved when public meets private. And, USAID isn’t exactly the first agency on the mind of the average biotechie looking for research support for an intriguing idea—that would be either the National Institutes of Health, the Small Business Administration, or Department of Defense. While Shah is obviously a smart, able, and ambitious guy, count me a skeptic: I’ll be shocked if USAID has any meaningful partnerships with any Northwest biotech companies one year from now.

Still, I figured there may be some people in the local biotech community who might be able to visualize a fruitful relationship with USAID. So I sat down with Shah for a few minutes after his talk to get a sense for how he’s approaching the job. Here are edited excerpts.

Xconomy: When I think of USAID, I think of people who provide food and water to disadvantaged parts of the world after a disaster. When I think of agencies that do work to stimulate life sciences R&D, it’s NIH and DoD. So what exactly can USAID do to bring forward new drugs, diagnostics, and vaccines?

Rajiv Shah: The answer is a lot. We make a significant amount of direct investment in research and product development. But I think we have some unique capabilities that could be even more effectively explored. We buy a lot of health commodities for low-income communities and low-income countries. They range from contraceptive commodities to malaria drugs to vaccines for children. That significant purchasing power could be used to create financial incentives for more technology development. We could work more effectively with other countries on the introduction of new technologies in a way that’s consistent with building strong, sustainable health systems. And we could build on our really rich record of identifying and developing those technologies that are uniquely appropriate for low-income settings where we might work in sub-Saharan Africa, or South Asia. Things that are affordable, easy to administer, and are heat-stable and not require a cold chain.

X: You mentioned in your talk that the President has a $63 billion, six-year program to stimulate global health innovation, but how much of that is within USAID, and how much purchasing power do you have?

RS: That figure represents the whole U.S. government’s global health work, which is primarily USAID, but also includes the President’s …Next Page »

Luke Timmerman wrote:

[Updated: 11:45 am Eastern, 3/17/10] Who was it that once said ‘if at first you don’t succeed, try, try again?’ This Friday, San Diego-based Somaxon expects find out from the FDA whether its persistence has paid off, and whether its insomnia drug is finally ready to be cleared for sale on the U.S. market.

The FDA has a deadline of Sunday, March 21 to complete its review of Somaxon’s application to market doxepin (Silenor) to help people get a better night’s sleep. Since the statutory deadline falls on a weekend, it’s likely the FDA will send its letter to the company before the end of the day Friday. For all you antsy traders out there, it’s entirely possible investors will have to wait until Monday to hear the news (but please don’t call to ask me to speculate on the exact timing).

It’s hard to imagine Somaxon (NASDAQ: SOMX) has much steam left in its engine, but it’s still in business while awaiting this latest FDA ruling. The company’s application was delayed in November 2008, formally shot down in February 2009, and rejected one more time in December. Somaxon has burned through more than $176 million of investors’ money since it was founded in 2003, and had just $5.4 million left in cash and investments as of its most recent quarterly report, current through September 30. Still, investors haven’t given up all hope—the company’s stock has rebounded after the FDA setback in December, boosting the company’s stock to $4.05 at yesterday’s close.

I have to say this optimism struck me as kind of odd, given what the company itself said in its quarterly report about its regulatory dealings.

“The regulatory approval process is inherently complex, and clinical and non-clinical data is subject to varying interpretations. As a result, as of September 30, 2009, the Company does not consider FDA approval of the NDA for Silenor to be probable in accordance with the criteria used for accounting purposes,” the company said.

[Updated with comment from sleep researcher.] Somaxon declined a request to comment on why it thinks Silenor deserves a place on the market. But Dr. Thomas Roth, a sleep researcher at Henry Ford Hospital in Detroit and a consultant to Somaxon, explained why …Next Page »

Luke Timmerman wrote:

[Updated: 5:15 pm, 3/17/10] Biotechies, of all people, ought to relate to an old quote often attributed to Charles Darwin. It’s the one about how the strongest and most intelligent aren’t necessarily the ones who survive—it’s the ones who are most adaptable to change.

That was the closest thing to a single theme running through a blazing fast industry overview from Steve Burrill, the industry maven who gave a keynote talk this morning at the Life Sciences Innovation Northwest conference at the Bell Harbor International Conference Center in Seattle. Burrill talked about how healthcare entrepreneurs can survive a financial crisis, regulatory uncertainty, the coming disruption of genome-based personalized medicine, and a transformation in how insurers and governments will pay for new drugs, devices, and diagnostics.

Even with all those waves of doubt washing over people who create those new products for a living, there is still plenty of reason to keep doing what they do, Burrill said. The biggest problems facing the world today—climate change, national security, food production, and health care—are all problems that biotechnology seeks to address.

“We are lucky to be alive today and to be part of this revolution,” Burrill said.

Burrill brought his trademark industry overview to Seattle this morning as part of his deal to co-sponsor the Innovation Northwest conference with the Washington Biotechnology & Biomedical Association. He has been analyzing, prognosticating, investing, dealmaking, speaking, and writing about biotech since the industry got going in the 70s. He reminded everybody that he had a role—how big, who knows—in some of the industry’s pioneering companies like Genentech, Cetus, and Amgen. But he was quick to note that if entrepreneurs today tried to build companies like people did in those days, they would certainly fail.

This was a ridiculously fast talk—146 slides spread over 40-some minutes, according to Burrill. I’ll just highlight a few themes that stood out. The slides are available here in PowerPoint if you’d like to look for yourself. [Updated: 5:15 pm, with proper working link to Burrill’s slides, sorry for the earlier link, which didn’t work.]

—Politics. Healthcare reform is only just getting started, Burrill says. The healthcare sector accounts for $2.5 trillion of the U.S. gross domestic product, but that will swell to $4 trillion by 2015 as populations keep aging, and society continues to turn once-deadly diseases into chronic illnesses that get treatment. It’s not sustainable, and governments in the U.S. and all over the world are going to have to start clamping down on costs, hard. Healthcare reform may pass Congress soon, but governments will not be able to afford to keep everybody alive in their country for as long as medical technology will allow.

“No matter what you do, the rich are going to pay and the corporations are going to pay for the health care costs of 30 million people to get coverage,” Burrill said. “There’s a tremendous conflict in this country between the demand for more access and lower cost.”

“This is changing the nature of who we are and what we do,” Burrill said.

—The financial crisis. Biotech, with its decade-long product development cycles …Next Page »

Luke Timmerman wrote:

Tekmira Pharmaceuticals, the Vancouver, BC-based developer of RNA interference drugs, said today it has formed a partnership with New York-based Pfizer (NYSE: PFE) to use its lipid-nanoparticle technology as a delivery vehicle for Pfizer’s RNAi drug candidates. Tekmira will make the drug formulations, while Pfizer will run the animal tests. This marks the latest significant partnership for Tekmira to use its RNAi technology, counting deals with Cambridge, MA-based Alnylam Pharmaceuticals and Roche. Terms of the Pfizer partnership weren’t disclosed.

Luke Timmerman wrote:

Seattle-based Presage Biosciences has a big dream for a biotech startup—and now it has seed capital to put that dream to the test.

Presage, a spinoff from the Fred Hutchinson Cancer Research Center, is announcing today it has raised $3.1 million from angel investors to get the company off the ground at a $5 million pre-money valuation. Presage isn’t saying who invested, but they are all individuals, mainly from the Seattle area, with IT and biotech backgrounds. The board is composed of founder Jim Olson, a cancer researcher at the Hutch; CEO Thane Kreiner, a former senior vice president at Santa Clara, CA-based Affymetrix (NASDAQ: AFFX); James Towne, an early president of Microsoft; and biotech entrepreneur George Todaro.

The idea at Presage is to radically improve the odds that cancer drug candidates will successfully navigate through clinical trials. Only about one out of every 10 cancer drugs that enters clinical trials ever makes it through the hoops necessary to become an FDA approved product. That means Big Pharma and biotech companies waste a huge amount of time and money on duds. Cancer treatment is a huge business, with a global market worth $66 billion a year, and is predicted to grow to $84 billion by 2012, according to Cowen & Company. With a market that big, more than 860 cancer drugs are in development, according to a survey last year by the Pharmaceutical Research and Manufacturers Association.

“We can help halt inefficient programs at the early stages before Big Pharma companies put millions of dollars into programs that are going to fail,” Olson says. “We can help weed out the winners from the losers early on.”

Presage has already struck a deal with a pharmaceutical company that wishes to remain anonymous, and it is generating revenue, Kreiner says. The startup has six employees, and is looking for lab space in Seattle. It’s possible that with a couple more pharmaceutical customers, Presage could turn profitable by the end of 2011, Kreiner says.

The way Presage hopes to pick cancer drug winners is unorthodox. It has developed a device with five needles that have holes along the sides. These needles can deliver five different kinds of chemotherapy drugs—or combinations of an experimental biotech treatment—to different localized regions of the tumor. The drugs are made to seep out within a small radius of the needle, so doctors can see how different regions of the same tumor respond to different drugs in their native environment.

The company’s original plan, described in this feature story in May, was to perform those tests on tumors from individual patients to give physicians a better idea of which drug to prescribe. But since this meant the device would be classified as a diagnostic, it would be subject to FDA review. And the FDA hasn’t seen a device quite like this for cancer, so the regulatory pathway was too uncertain …Next Page »

Luke Timmerman wrote:

You spoke, and we listened.

Demand has been surging for the event we’re organizing on the 20-year outlook for San Diego’s life sciences cluster. We sold out all 130 tickets with three weeks left before the big event on March 31. While I must say we were pretty darn happy about that, it also meant many would-be attendees would be left out. But thanks to the gracious and flexible hosts over at Biogen Idec, we found a solution: We’re moving this event into a bigger commons on their campus, with enough room for 30 more regular seats, and 10 front-row VIP tickets.

In case you missed it, this event will feature an interactive panel discussion with Paul Schimmel of The Scripps Research Institute, Dan Bradbury of Amylin Pharmaceuticals, and Fred “Rusty” Gage of the Salk Institute. John Mendlein, the chairman of Fate Therapeutics, will moderate. This stellar panel will be followed by quick 3-minute “burst” presentations by a handful of organizations pursuing innovative biotech ideas in San Diego—Ambrx, Biogen Idec New Ventures, Helixis, Receptos, and VentiRx Pharmaceuticals.

I am flying in from Seattle for this, and Xconomy’s founder and editor in chief Bob Buderi will also be on hand from Boston. My job will be to roam with the microphone to help people aim their questions at this great lineup of speakers. When that is done, Bob and I will stick around the networking reception so we can get to know some of our readers a little better. See you on the 31st.

Luke Timmerman wrote:

[Updated: 8:38 am Eastern, 3/15/10] Amylin Pharmaceuticals and its partners Eli Lilly and Alkermes are going to have to wait a while to celebrate. The FDA has delayed an application from San Diego-based Amylin (NASDAQ: AMLN) and Indianapolis-based Eli Lilly to start marketing their new diabetes drug, the first once-weekly shot, as a more convenient alternative to control blood sugar.

The silver lining is that the drug, exenatide once-weekly, doesn’t need to pass any new animal tests or clinical trials before it can be cleared for sale in the U.S., the companies said today in a statement. The FDA’s “complete response letter” raises issues around finalizing the prescribing information that guides physicians, along with a Risk Evaluation and Mitigation Strategy (REMS) program and “clarification of existing manufacturing processes,” the companies said. The FDA raised some issues at a December inspection of Amylin’s Ohio manufacturing plant, although those have been addressed, the companies said.

The drug application is being closely watched because it takes the active ingredient in Amylin’s best-selling drug and combines it with a biodegradable polymer technology from Waltham, MA-based Alkermes (NASDAQ: ALKS) that makes it last longer in the blood. That polymer is the difference between an existing drug that must be injected twice a day and the newer form, which only requires one shot a week. The product will be marketed under the name Bydureon, the companies said.

[Updated company comment, 8:38 am Eastern.] The companies have already begun working on their response to the FDA letter, and expect to submit answers within a few weeks, Amylin CEO Dan Bradbury said in a conference call this morning. “We have a clear path forward,” Bradbury said.

Amylin has the most at stake in the FDA’s decision to approve exenatide once-weekly, since it only has two other approved products, and the new drug is poised to drive its earnings for years to come. Alkermes stands to collect a 7.5 percent royalty on worldwide sales of the drug, without having to pick up any expenses for marketing or manufacturing. The drug is likely to generate peak worldwide sales of about $2 billion in 2017, according to JP Morgan analyst Cory Kasimov. An estimated 25 million people in the U.S. suffer from the chronic disease.

Investors appeared relieved that the FDA’s issues can be resolved relatively quickly. Shares of Amylin climbed about 5 percent in pre-market trading to $21.25 at 8:08 am Eastern time after the announcement.

Luke Timmerman wrote:

San Diego-based Ligand Pharmaceuticals (NASDAQ: LGND) said today that its partner, GlaxoSmithKline, has won clearance to start marketing a new drug for a platelet deficiency in Europe. The treatment, eltrombopag (Revolade), is for patients for idiopathic thrombocytopenia purpura (ITP), a rare bleeding disorder in which the immune system attacks platelet cells that help people form clots. The drug, discovered by Ligand and developed by GSK, was approved in the U.S. in November 2008, and is marketed under the brand name Promacta.

Luke Timmerman wrote:

[Updated: 9:40 am Pacific, 3/15/10] Plenty of ink has been devoted over the years to how San Diego’s biotech family tree can be traced back to Hybritech. The company was born in biotech’s halcyon days in the ’70s, and it quickly became the magnet for young scientific and business talent in San Diego. After Eli Lilly bought the place for more than $400 million in 1986, many of the young turks went on to plant seeds at new ventures all around San Diego and other biotech hubs around the world.

That story has been told well over the years, including this piece from 2003, and another in 2008 from the San Diego Union-Tribune. So instead of focusing on the well-known characters who made it happen—Ivor Royston, Howard Birndorf, Ted Greene and others—I wondered what I might find if I used modern social networking tools to dig deeper and assemble an updated directory of where Hybritech alumni are today, encompassing bigshots and rank-and-file. Getting to know the history also seemed like a good idea as I prepare to host the big event Xconomy is organizing on the 20-year outlook for San Diego life sciences on March 31.

The methods here, I must say, are pretty basic. I sought to include anybody who worked at Hybritech at some point. I looked around in the archives of other publications like the Union-Tribune, and The Scientist. I cited biographies from Forbes.com. I made heavy use of employment histories people have posted on LinkedIn. And of course, I’m citing some of my own original reporting from Xconomy. It should be noted that I can’t guarantee that all the information is up to date, especially the user-generated content from LinkedIn. The list has 158 names at last count.

Now’s where I hope you can step in to help. If you see anything that’s out of date, or incorrect, please let me know and I’ll fix it. Over time, I hope this story can become a richer and more valuable resource for Hybritech alumni to connect and re-connect.

With that, here’s the list I’ve put together in alphabetical order, with the most updated titles and affiliations I found online. If you have any questions, comments, or new information, please send me a note at [email protected] or [email protected].

Tom Adams, chief technology officer, Iris International

Clarence Ahlem, vice president, Harbor Biosciences (formerly Hollis-Eden Pharmaceuticals) [Added: 10:10 am, 3/12/10]

Roger Alsop, lead scientist, Prozyme

Tony Alvarez, biotechnology/medical device supply chain professional

Kim Aposporos, chemistry supervisor, Alvarado Hospital Clinical Laboratory [Added: 7:40 am, 3/15/10]

Glenn Armstrong, Senior Manager Clinical Affairs, Siemens Healthcare Diagnostics [Added: 8:05 pm, 3/14/10]

Kelley Asselmann, vice president, Cast Glass Images [Added: 9:25 am, 3/15/10]

Ronald Backes, director of business development, Hitachi Chemical Diagnostics …Next Page »

Luke Timmerman wrote:

[Updated: 4:40 pm Eastern, 3/12/10] Aveo Pharmaceuticals is proving once again that IPO investors have a limited appetite for biotech companies. The Cambridge, MA-based developer of cancer drugs sold its initial public shares to investors last night at $9, a long shot from its hoped-for range of $13 to $15.

The company (NASDAQ: AVEO) started trading today, and dropped by a penny to close at $8.99. Aveo, which has no products currently on the market, will rake in $81 million for its R&D programs by selling 9 million shares to public investors, according to Renaissance Capital. That means with 29.6 million shares outstanding, Aveo now has a market valuation of about $267 million. JP Morgan and Morgan Stanley were the deal’s lead underwriters. The underwriters have 30-day options to buy another 1.35 million shares.

The lack of a bidding frenzy for Aveo is really just the latest sign of lackluster interest in biotech from public investors. Cambridge, MA-based Ironwood Pharmaceuticals (NASDAQ: IRWD) was first out of the gate this year, when it priced its IPO at $11.25, below its goal of $14 to $16. Later that month, Hayward, CA-based Anthera Pharmaceuticals cut its IPO price in half, settling for $7 a share. And San Diego-based Trius Therapeutics was the on the verge of going public when it postponed its deal earlier this month, saying it had to reconsider some new FDA clinical trial protocol.

Still, the Aveo IPO will give its venture capitalists and employees some reason to celebrate, if not to party like it’s 1999. The top five shareholders in the company, according to the most recent IPO prospectus, are Cambridge, MA-based Biogen Idec (10.4 percent), MPM Capital (8 percent), Highland Capital Partners (7.4 percent), Venrock Associates (6 percent), and Prospect Venture Partners (5.8 percent). Aveo CEO Tuan Ha-Ngoc should have a 3 percent stake in the company after the offering. These numbers are probably a bit off, because they were based on the assumption that Aveo would sell 7 million shares in its IPO, when it actually sold 9 million at a lower price than forecast.

Much of the money will go toward the final stage of clinical trials for tivozanib (or AV-951) for kidney cancer. That drug showed some impressive clinical trial results at last year’s meeting of the American Society of Clinical Oncology, suggesting it may be able to stack up well against a couple of tough competitors in Pfizer’s sunitinib (Sutent) and Bayer and Onyx Pharmaceuticals’ sorafenib (Nexavar). Aveo, founded in 2002 based on science from the Dana-Farber Cancer Institute in Boston, has become known for what it says is a more accurate method for mimicking cancer in mouse experimental models, compared with the traditional “xenograft” approach. Merck, Eli Lilly, OSI Pharmaceuticals, and Biogen Idec have all used the technology as part of their drug discovery efforts.

Luke Timmerman wrote:

Seattle Genetics, the developer of antibody treatments for cancer, said today it has received a new patent which will extend its proprietary rights to its lead drug for Hodgkin’s disease until at least 2025. The U.S. patent covers technology for a linker that selectively unloads a potent toxin called auristatin on the target cell of interest. This is the technology Seattle Genetics uses in its lead “empowered antibody” program called brentuximab vedotin (SGN-35), and which several of its partners use under licenses. Seattle Genetics expects to seek FDA approval of brentuximab vedotin to treat Hodgkin’s disease in the first half of 2011.

Luke Timmerman wrote:

Bruce Montgomery, the senior vice president of Gilead Sciences in Seattle, is joining the board of directors at Seattle-based ZymoGenetics (NASDAQ: ZGEN). ZymoGenetics also said that Lars Rebien Sorensen, the CEO of Novo Nordisk, has resigned from the board. Montgomery recently led the team at Gilead that won FDA approval of a new inhalable antibiotic treatment for cystic fibrosis.

Luke Timmerman wrote:

We had a little bit of everything on the Seattle biotech beat this week: muckraking, exclusive breaking news, in-depth analytical features, and a sharp guest editorial.

—Seattle-based Cell Therapeutics (NASDAQ: CTIC) has been known to disclose less-than-flattering news in SEC filings late on Fridays, when most journalists are wiped out and heading home. Sure enough, late last Friday, we were able to shine a light on how Cell Therapeutics’ board awarded its top executives with a big round of cash bonuses, while life for its shareholders hasn’t been so hot.

—Seattle-based Dendreon (NASDAQ: DNDN) has very little margin for error in the IT system that it needs to keep shipments running smoothly for its prostate cancer drug, assuming it gets FDA approval as expected in May. One of the key players Dendreon is relying on for help is Direct Technology, a custom-software developer that has made its reputation on running a key program for California’s 9-1-1 system for 12 years with zero downtime.

—The Institute for Systems Biology, the Seattle nonprofit research center co-founded by biotech pioneer Leroy Hood, made a flurry of headlines this week. First, the Institute said it pocketed a $6 million gift from a California venture capitalist who wishes to remain anonymous. Then Hood told me that the Institute is looking for new space in South Lake Union that’s twice as big as the Institute’s current home. Lastly, the Institute talked about how sequencing entire genomes of families could become a new paradigm for research, based on intriguing findings published in this week’s issue of the journal Science.

—We also had some sad news to report. Joe Eichinger, one of the Northwest’s leading medical device entrepreneurs of the past three decades, died of pancreatic cancer at age 65. Eichinger made a powerful impact on this community, which you can see by reading some of the comments that people have left at the bottom of the story. If you knew Joe and have a memory you’d like to share, please leave a comment of your own.

—One of the companies that Eichinger co-founded, Bothell, WA-based Ekos, has marshaled some promising evidence that its ultrasound-based clot-busting device may be useful for patients with hemorrhagic strokes. I dug into how this technology could change the way many stroke patients are treated with David Newell, a neurosurgeon at Swedish Medical Center who spearheaded an initial study of nine patients here in Seattle.

—Stewart Lyman exposed a few inconvenient truths about the pharmaceutical R&D model in yet another incisive guest editorial. I’m waiting for an industry chieftain to write in and say Lyman has it all wrong and that the R&D model is running just dandy as is. Don’t worry, I’m not holding my breath.

Luke Timmerman wrote:

[Updated: 9:20 pm Pacific, 3/10/10 with independent expert comment] Doctors and researchers in the future won’t just want to look at your genome to see how to treat or prevent illness. Instead, they will look at how all of an individual’s DNA compares with the closest members of their family, according to biotech pioneer Leroy Hood.

That’s one of the big conclusions from a study by Hood and his colleagues at the Institute for Systems Biology, the University of Washington, the University of Utah, and Mountain View, CA-based Complete Genomics. Researchers at those organizations studied the whole genomes of a family of four, searching for clues into why an otherwise healthy mother and father produced two children with a couple of rare genetic disorders. The findings are being published in this week’s issue of Science.

“The sequencing data from families is far more accurate than with random individuals,” Hood tells me. “This increased accuracy makes it easier to find the genes that caused these genetic diseases.”

Gene sequencing has been on a torrid pace of innovation over the past few years, as established toolmakers like Illumina, Life Technologies, and Roche have been racing to lower the cost of sequencing an entire human genome to as little as $10,000. Complete Genomics has raised the ante even more, saying its new business model allows it to sequence entire genomes for as little as $5,000. This better, faster, cheaper technology is making it possible for the first time to do studies like this in a family of four people, to find the underlying genetic abnormalities for a disease like Miller Syndrome, which causes facial malformations like cleft palate.

The new paper represents just the beginning of this kind of research, Hood says. The Institute for Systems Biology has also paired up with Complete Genomics to sequence 100 genomes of individuals, family members, and control subjects, to better understand the roots of Huntington’s disease.

“There’s going to be a flood,” of family genome studies, Hood says. “An enormous number of people with next-generation sequencing machines are going to do things like this.”

Gilbert Omenn, the director of the University of Michigan’s Center for Computational Medicine and Biology said, “this is a landmark paper.” Omenn wasn’t involved in the project.

By sequencing the genomes of a family, researchers were able to identify 70 percent of the sequencing errors along the 3-billion letter strings of DNA, because they were simply inconsistent with inheritance patterns first articulated by Gregor Mendel. When researchers sequence random individuals without having family members as a reference point, it’s much harder to find the errors, Hood says. It’s basically about finding a better way to separate the signal from the noise in a pool of data that’s as vast as the genome.

Sequencing the entire genomes of this family of four enabled researchers to narrow down their candidate list to just four genes thought to be primarily responsible for Miller Syndrome and primary ciliary dyskinesia, a progressive disease that affects the lungs and other organs that depend on cilia.

By sequencing an entire family, researchers were also able to see how much the genome changes from one human generation to the next. The researchers found that gene mutations from parent to child occurred at half the most widely expected rate.

“Our study illustrates the beginning of a new era in which the analysis of a family’s genome can aid in the diagnosis and treatment of individual family members,” said David Galas, one of Hood’s colleagues at the Institute for Systems Biology, in a statement. “We could soon find that our family’s genome sequence will become a normal part of our medical records.”

[Updated: 9:20 pm Pacific, 3/10/10, with comments from Gilbert Omenn of the University of Michigan]

Xconomy: What implications you think this publication might have for the growing field of complete genome sequencing, now that the price is coming down to a practical point to do studies like this?

Gilbert Omenn: This study will give complete genome sequencing a huge boost, especially as the cost declines and further applications are demonstrated. These kinds of studies will also put a premium on bioinformatics.

X: What do you think this approach is really useful for?

GO: This approach will have many uses, as already demonstrated in this initial paper. Basic questions about mutation rates in different sequence context or in varying regulatory context will warrant investigation. Searching in families for evidence of mutations of various types attributable to specific environmental exposures might advance our understanding of toxicology from chemicals and from radiation. Finding the molecular cause for rare disorders in analogous family quartets should be facilitated as costs drop. Recognizing sequence errors and removing them should become a routine part of sequencing studies.

X: What are its limitations?

GO: Repetitive DNA sequences, as in duplications and satellites, remain quite challenging.

As reported here, certain findings require extensive confirmation or validation with re-sequencing or orthogonal complementary methods, illustrated here with mass spectrometry. Data management and advances in bioinformatics tools will be at a premium.

The discovery of the molecular lesion for Miller syndrome still depended on study of two additional affected individuals, who could have had different alleles or even different gene loci involved.

Luke Timmerman wrote:

It’s pins-and-needles time for employees and investors at San Diego-based Amylin Pharmaceuticals and Waltham, MA-based Alkermes. The FDA has a deadline of Friday, March 12, to say whether it has approved a new drug from Amylin and Alkermes (oh yeah, and Eli Lilly too) which seeks to transform diabetes treatment with the first once-weekly injectable drug to control blood sugar.

Amylin (NASDAQ: AMLN) has the most riding on the FDA’s decision of whether to approve exenatide once-weekly, because this product with billion-dollar potential will likely be its biggest sales driver for years to come. Alkermes (NASDAQ: ALKS) developed the technology to make the drug last an entire week in the bloodstream, and it stands to collect a 7.5 percent royalty on worldwide sales, without spending a nickel on manufacturing or marketing. Lilly, Amylin’s marketing partner is a huge company that needs a stream of hits to keep earnings up.

For those in need of a refresher, here goes. This diabetes drug is a first-of-its kind treatment that takes a key ingredient in Amylin’s top-selling drug, exenatide (Byetta), and packages it with a biodegradable polymer from Alkermes to make it last longer in the blood. The drug has shown in clinical trials it can control blood sugar more effectively with just one shot a week, compared with the existing drug, which requires two shots a day. The new convenience also means patients shouldn’t have to worry as much about the peaks and valleys of drug concentration in their bloodstream that leads to a lot annoying monitoring through pinpricks.

If the drug is approved by the FDA, it catches on in the marketplace, and more patients stick with their prescribed regimens, it could have an impact on the diabetes epidemic. An estimated 25 million people in the U.S. have diabetes, and as the obesity epidemic rages on, the incidence of diabetes is expected to double over the next 25 years, Amylin CEO Dan Bradbury told me back in January.

The drug has about an 85 percent chance of winning regulatory approval sooner or later, and could generate worldwide peak sales of $2 billion by 2017, JP Morgan analyst Cory Kasimov, in a note to clients March 8.

“This is every bit as meaningful for us as a company as it relevant to patients,” says Richard Pops, the CEO of Alkermes. “Exenatide once-weekly really has the potential to affect many, many, many patients with this disease in this country, and around the world.”

Investors in both Amylin and Alkermes have been bidding up those stocks to near 52-week highs this week in anticipation of good news from the FDA. But there could be wrinkles in how this plays out.

There are four possible scenarios that Kasimov mapped out earlier this week, which I’ll sum up here.

—First, the FDA could approve the drug with some standard boilerplate warning about risk of patients getting pancreatitis, but not a more severe Black Box warning about risk of getting thyroid cancer. The odds aren’t great (15 percent probability), but that would drive Amylin and Alkermes stock up …Next Page »

Luke Timmerman wrote:

Leroy Hood’s eye is turning from the north to the south side of Seattle’s Lake Union. The biotechnology pioneer and his colleagues at the Institute for Systems Biology are looking for new digs that are twice as big as their 65,000 square foot facility on the north side of the lake, Hood says.

“We just don’t have enough space. It’s an ideal building, we love the location, and the view of the city is terrific,” Hood says. “But we need twice as much space.”

He added: “We are thinking seriously about moving to South Lake Union. In all probability, it will be the old Rosetta building there.”

He’s talking about the fancy facility developed in 2004 by Paul Allen’s Vulcan Real Estate to house the Rosetta Inpharmatics unit of Merck. That cutting-edge biology and computing facility had room for about 300 employees, but it has been much quieter since the fall of 2008 when Merck said it was shutting down that operation as part of global cost cuts. Hood never worked there, but he was partly responsible for its creation, since he was a co-founder of Rosetta back in the mid-90s with Stephen Friend and Lee Hartwell.

Few people in Seattle know much about Hood’s nonprofit research center, and it puzzles more than a few biologists, but it has definitely been on a roll the past couple years. The basic idea for the Institute, which Hood co-founded with Alan Aderem and Reudi Aebersold in 2000, is to use high-powered computers to study complex networks of genes and how they interact, rather than the traditional ways of biology that Hood says are too narrow, looking at one gene, or one protein in isolation. He says the holistic approach of studying entire biological systems will lead science down the path to a historic attitude shift from reactively treating disease to what he calls “P4 medicine,” or predictive, preventive, personalized, and participatory medicine.

The Institute is known as a hotbed of entrepreneurial activity, having spawned the Accelerator, Seattle-based NanoString Technologies, Integrated Diagnostics, and an intriguing partnership with Mountain View, CA-based Complete Genomics to sequence 100 entire human genomes. But none of those for-profit efforts have generated windfall profits that could provide the comfort, of, say, an endowment to support the nonprofit institute for decades to come.

One of the watershed moments for the Institute came in June 2008 when it scored a five-year, $100 million commitment from the government of Luxembourg. In January, an independent review of research institutes around the world said the Institute for Systems Biology produced the highest impact scientific publications of any U.S. research center from 2003 through 2007. And just this week, the Institute said it received a $6 million gift from an unnamed California venture capitalist to further its research in personalized medicine, biofuels, and global health.

It’s all starting to add up to a growth curve that few biotech companies in town can match. The Institute had 230 employees, and an annual budget of $35 million, when Hood gave a talk about it in February 2009 at a Technology Alliance event. One year later, it has 300 employees, and an annual budget of $45 million, Hood says. The Institute’s strategic plan over the coming five to eight years is to add eight to 10 new faculty members, bringing the faculty roster to 20, with a staff of 400 to 450 people, operating with a “substantially” bigger budget, Hood says.