Author: Ryan McBride

Ryan McBride wrote:

Health insurers have wasted billions of dollars on reimbursing drugs that don’t work for certain patients. But Cambridge, MA-based Gene Network Sciences might have a cure for this spending ailment. It is using supercomputing technology to build databases that can match patients with the most suitable drugs or other treatments, company CEO Colin Hill says. Xconomy.

This is a major change for Gene Network Sciences, which has formed a new subsidiary called GNS Healthcare to focus on the healthcare market. Since the Cornell physicists Hill and Iya Khalil formed the startup in 2000, it’s been known mostly for performing computer-simulated drug research with its signature reverse engineering/forward simulation technology for such major companies as Biogen Idec (NASDAQ:BIIB), Johnson & Johnson (NYSE:JNJ), and Pfizer (NYSE:PFE). While Gene Network Sciences is continuing to work in drug research and development, Hill says, the healthcare market has been a major focus for the firm over the past year.

Within the healthcare market, the company is initially seeking partnerships with pharmacy benefit management firms. These outfits, such as CVS Caremark (NYSE:CVS) and Medco Health Solutions (NYSE:MHS), handle prescription drug plans for more than 210 million Americans, the majority of the total U.S. population, according to the Pharmacy Care Management Association, an industry group based in Washington, DC. The PBMs, as they are often called, have already adopted e-prescribing to reduce errors and streamline how doctors order prescriptions for patients, and Hill says these companies have also implemented computer models. But the drug benefit mangers don’t have the artificial intelligence capabilities that his firm offers he says.

“For the payers, it’s really about using innovation to deliver smart, more cost-effective medicines,” Hill says. “The next generation analytics, like GNS Healthcare provides, will match the right drugs to the right patients for the right price.”

The company is taking a different technical approach from its drug R&D work to solve problems for healthcare customers, Hill says. For drug companies, Gene Network Sciences has …Next Page »

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

The world of outsourced drug research and development might get a lot smaller. Charles River Laboratories International is aiming to buy the Chinese R&D services firm WuXi PharmaTech for a whopping $1.6 billion, the companies announced this morning.

Wilmington, MA-based Charles River (NYSE:CRL) reported that it plans to gobble up Shanghai-based WuXi in a deal that values WuXi (NYSE:WX) at $21.25 per share, a 28-percent premium on the firm’s closing stock price on April 23. Charles River is offering to buy WuXi for a combination of cash and its common stock. The deal requires shareholder approval and is slated to close in the fourth quarter of this year, according to the companies.

The buyout would significantly expand Charles River’s global presence in the outsourced R&D market both in the U.S. and China. WuXi has more than 1.8 million square feet of drug R&D space in China, as well as three sizable research and manufacturing centers in Atlanta, Philadelphia, and St. Paul, MN, according to its website.

“This transaction revolutionizes the contract research landscape by creating the only global contract research organization, or CRO, to offer fully integrated research and drug development services from molecule creation to first-in-human testing,” said James Foster, Charles River’s chairman and CEO, in a statement. Under the terms of the merger deal, Foster would be chief executive of the combined entity, and WuXi’s CEO, Ge Li, would be a corporate executive vice president and be president of the company’s operations in China.

WuXi is one of the fastest-growing competitors in the outsourced drug R&D world, fueled by China’s growing population of Ph.D.s and scientists, the Wall Street Journal reported yesterday. (The Journal article, published yesterday, gives a decent overview of both companies’ capabilities.) Drug companies are expected to increase their use of CROs as they continue to trim the size of their own R&D organizations to reduce expenses and focus more resources on the marketing end of the pharmaceutical business.

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Ryan McBride wrote:

Venture capitalists are placing a big bet on a San Diego startup’s new approach to treating cancers by targeting certain hormones. Aragon Pharmaceuticals reports this morning that it plans to use $22 million raised in its Series B round of funding to advance its lead drug for prostate cancer into an initial clinical trial.

Aragon, launched in May 2009, has raked in the funding from new investor Aisling Capital of New York City as well as OrbiMed Advisors of New York City and The Column Group in San Francisco. The Column Group and OrbiMed were the venture backers in Aragon’s $8 million Series A round last spring. The startup has now raised $30 million in venture funding.

The fresh cash is expected to fund a Phase I clinical trial of ARN-509 that is due to begin in the middle of this year. The company wants to develop the drug for prostate cancers that can’t be wiped out by removing a patient’s testicles. The drug is intended to target certain proteins that typically bind with testosterone, which can cause prostate tumors to grow out of control. Aragon also is researching other drugs for a similar approach to treating breast cancer.

“The Column Group values and invests in ‘big ideas’ like Aragon’s approach to developing treatments that circumvent the challenges of drug resistance in hormone-sensitive cancers,” said Peter Svennilson, a managing partner of The Column Group and chairman of Aragon, in a statement. “We are excited with the company’s progress to date and very supportive as Aragon moves ARN-509 into the clinic and continues to build its drug discovery pipeline.”

Aragon’s scientific founders are Charles Sawyers, a researcher at Memorial Sloan Kettering Cancer Center and the Howard Hughes Medical Institute, and Michael Jung, a UCLA professor of chemistry and biochemistry.

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

From the moment GlaxoSmithKline acquired Cambridge, MA-based Sirtris Pharmaceuticals about two years ago for $720 million, the pharma giant said it wanted two of Sirtris’ principals, Christoph Westphal and Michelle Dipp, to help it connect with some of the best people and biotech ideas in Boston. That’s still true today, although the specific roles for Dipp and Westphal are shifting in a couple important ways.

Yesterday Xconomy broke the news that Westphal is ending his six-year tenure as CEO of Sirtris, the Cambridge, MA-based developer of drugs for diseases of aging, to take the helm at Glaxo’s venture capital firm, SR One. Yet Westphal is also resigning from his job as senior vice president of Glaxo’s Center of Excellence for External Drug Discovery (CEEDD). Dipp is now being promoted to take on that big job, which involves identifying and managing partnerships with biotechs who can help fill up Glaxo’s drug pipeline. Dipp, who had been the U.S. head of the center serving as a deputy to Westphal, is now in charge of the center’s U.S. and U.K. operations, as Westphal had been.

If you’re older than 30 and still living at home, don’t read the rest of this story. Dipp, who is in Theo Epstein-wunderkind territory at the age of 33, is now the youngest senior vice president at on of the the top 10 largest pharmaceutical companies in the world. She’s in charge of the external drug discovery unit that Glaxo created in 2005.The Glaxo business unit has gained more influence over biotech companies in recent years because of the limited availability of venture capital for young startups, making the cash the young firms can bring in from option-based deals with drug companies a viable way to stay afloat. A good example of one of these deals is the partnership Glaxo formed last year with Lexington, MA-based Concert Pharmaceuticals. Dipp says her group oversees about a dozen such partnerships in all.

Dipp, who has an MD and a Ph.D in pulmonary physiology from the University of Oxford, found her way into the business side of biotech quickly. She struck an important deal early in her career by becoming an early investor in Sirtris while she was a member of the investment team at the Wellcome Trust, a London-based nonprofit that is the world’s second-biggest funder of medical research. At the Wellcome Trust, she got to know Westphal, who recruited her to join then Sirtris as one of its founding employees in 2005.

But Dipp and Westphal have more on their plate than just what they are doing at GlaxoSmithKline. They, along with fellow Sirtris co-founder Rich Aldrich, are launching …Next Page »

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Ryan McBride wrote:

Genzyme has given its first-quarter 2010 earnings a $175 million haircut. The Cambridge, MA-based biotech firm (NASDAQ:GENZ) said today that it expects to pay that amount to the FDA due to deficiencies at its manufacturing plant in Allston, MA.

The company and the FDA are negotiating terms of a consent decree, under which the firm would agree to certain deadlines for addressing problems at the Allston plant, says Bo Piela, a spokesman for Genzyme. In addition to the $175 million charge, the company says that it expects to pay 18.5 percent of its revenues on sales of products shipped from Allston if it fails to meet deadlines for moving its deficient operation for filling medicine vials away from the plant. (In November, the FDA warned doctors that it found foreign particles in medicines made at the Allston plant, including fragments from a rubber vial stopper used in the deficient operation in question.) Those deadlines are still under negotiation. Also, the company is in talks with the agency about setting deadlines for when broader improvements will need to be made at the plant, and the company would have to pay $15,000 per day after those deadlines until the operations are compliant.

Genzyme says that it expects to wrap up negotiations with the FDA about the terms of the consent decree sometime in the second fiscal quarter of 2010. In the meantime, Piela says, the company has already begun to move the medicine vial filling operations from its Allston facility to its plant in Waterford, Ireland, as well as to a contract manufacturing facility owned by Hospira (NYSE:HSP), a specialty drugmaker based in Lake Forest, IL.

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

Christoph Westphal is leaving his CEO job at Sirtris Pharmaceuticals, the Cambridge, MA-based developer of drugs that target genes linked to the aging process, to get back into the venture capital game, according to an e-mail Westphal sent to friends and colleagues as well as Xconomy.

Westphal says in his note that he is taking over as head of SR One, Glaxo’s venture capital arm. He’s also working with fellow Sirtris alumni Michelle Dipp and Rich Aldrich on a new Boston venture firm, Longwood Founders Fund, according to the note. (Last week the Boston Globe reported that Glaxo is backing Longwood Founders Fund, which appeared on our radar back in February.)

Still, Westphal isn’t relinquishing all of his ties to Sirtris. He is going to be keeping a close eye on the advancement of Sirtris’s drugs for diseases of aging as co-chair of the Sirtris scientific advisory board. George Vlasuk, who was named president of Sirtris last year and has been in charge of its day-to-day operations, will replace Westphal as the firm’s CEO, according to Westphal’s e-mail.

Westphal’s career move could be viewed as a return to his roots in the life sciences industry. He first joined Sirtris as a co-founder and interim CEO in 2004, while he was a general partner at Polaris Venture Partners in Waltham, MA. (He eventually left Polaris to lead Sirtris full-time.) During his days as a venture capitalist at Polaris, he was a founder of other high-profile biotech firms in the Boston area such as Alnylam Pharmaceuticals (NASDAQ:ALNY), Momenta Pharmaceuticals (NASDAQ:MNTA), and Acceleron Pharma.

Glaxo is now giving Westphal the keys to its own corporate venture fund, at a moment of big change at SR One. Westphal is becoming president of the fund, taking over the responsibilities previously held by Russell Greig, a 30-year Glaxo veteran. Greig left SR One last month, according to this report by the In Vivo Blog. That departure created an opening at the exact moment when corporate VC arms are gaining prominence as traditional venture firms falter, In Vivo noted.

The SR One position can be one of the plum jobs in biotech venture investing. According to the SR One website, the firm operates as an independent unit of GSK and has invested $600 million since 1985. The fund invests in companies all over the world, and some of its portfolio companies in the Boston area include Aileron Therapeutics, Genocea Biosciences, and Concert Pharmaceuticals.

[Disclosure: Xconomy’s brand new life sciences columnist, Sylvia Pagán Westphal, is married to Christoph Westphal. Sylvia had no involvement in this story, we swear!]

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Ryan McBride wrote:

Dyax (NASDAQ:DYAX), a Cambridge, MA-based biotech company, reports today that it has sold its rights to royalties and fees from sales of a hemophilia treatment it discovered to Paul Capital Healthcare for up to $12 million. The deal includes a $10 million upfront payment and up to $2 million in milestone payments tied to  sales of the hemophilia treatment in 2010 and 2011. Drug giant Pfizer (NYSE:PFE) is commercializing the product, a recombinant Factor VIII therapy, which Dyax discovered with its patented phage display technology.

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

Javelin Pharmaceuticals (AMEX:JAV), a Cambridge, MA-based developer of pain treatments, reports today that it has nixed its merger agreement with Myriad Pharmaceuticals (NASDAQ:MYRX) and accepted a $145 million buyout offer from the specialty drugmaker Hospira. Lake Forest, IL-based Hospira (NYSE:HSP) plans to begin its tender offer to acquire shares of Javelin’s common stock on Wednesday for $2.20 per share. Hospira has also agreed to provide Javelin with three loan facilities of $4.5 million, $8.3 million, and $4.4 million for Javelin to fund operations, to repay loans from Salt Like City-based Myriad, and to cover fees and expenses related to the termination of Javelin’s previous deal with Myriad, respectively.

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Ryan McBride wrote:

Hungry cancer cells beware. Cambridge, MA-based Agios Pharmaceuticals has become $130 million richer through its new deal with the venerable drugmaker Celgene to advance drugs intended to starve cancer cells to death, the companies report this morning.

Summit, NJ-based Celgene (NASDAQ:CELG) is paying big bucks to Agios in the form of payments and equity investments for an exclusive option, for a certain time span, to license and develop any of Agios’s experimental drugs. Agios can also earn up to $120 million in milestone payments for each of the drugs Celgene decides to license. Celgene can also pay Agios to extend the life of this arrangement, which essentially makes Agios into Celgene’s own cancer metabolism drug unit for a limited amount of time, without Celgene having to outright acquire the startup.

This deal is the latest in a series of big plugs for Agios and its approach to treating cancer. The company, formed in July 2008, is discovering drugs intended to block metabolic enzymes that nourish tumors. Last November the company caught the attention of the cancer research community with its first major paper in Nature, which showed that in lab experiments an enzyme previously thought to be innocuous could mutate into a nasty culprit in feeding brain cancer cells. The findings opened up the potential to develop drugs that target the mutated enzyme to treat cancers in which it is present. And last year the company also recruited David Schenkein, a former head of cancer drug development at the biotech powerhouse Genentech, to be its chief executive.

“This transformational alliance provides Agios with the long-term resources and flexibility to extend our leadership position in the cancer metabolism field and to advance our capabilities and programs as an integrated, independent company,” Schenkein said in a statement.

Agios has now raised, through alliances and investments, more than $163 million in less than two years. That’s a whopping sum for a young biotech launched in these turbulent financial times. (Agios previously raised $33 million in a Series A round of funding from Boston-area firms Third Rock Ventures and Flagship Ventures, as well as Arch Venture Partners in Seattle.) Still, the startup hasn’t proved that its drugs are safe or work in humans, and it will take years and lots of successes in clinical trials for the company to earn the lucrative milestone payments promised in its deal with Celgene.

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

The trick to beating cancer could be a single test that shows all known genetic traits in each person’s tumor, and that also matches those results to the best treatments. Boston-based Foundation Medicine reports today that it has raised the first part of a planned $25 million round of Series A venture funding to make comprehensive genomic analyses of tumors a standard tool in the fight against cancer.

A crack team of cancer, genetics, and industry veterans from the Boston area has assembled around the startup. Boston-based Third Rock Ventures, founded by former executives of the cancer drugmaker Millennium Pharmaceuticals, has incubated the company and led the first-round financing. Alexis Borisy, an entrepreneur-in-residence at Third Rock and the former CEO of Cambridge-based CombinatoRx (NASDAQ:CRXX), is the startup’s founding chief executive (something we were the first to report back in February). And Eric Lander, a pioneer of genomics research and an advisor to President Barack Obama on science and technology policy, is headlining the group of scientists and physicians who are advising the startup.

Foundation Medicine, which was formed in 2009, has come into being as high-speed DNA sequencing and a slew of academic studies help to uncover new genetic mutations that, say, protect tumors from certain therapies, or help cancer cells grow out of control. Drug companies are developing cancer drugs for patients who have specific genes that make them likely to respond well to the treatments, building on Roche-Genentech’s success in marketing the breast cancer drug trastuzumab (Herceptin) for women with the HER2 gene. Also, a growing number of startups are focusing on providing new genetic tests that help guide physicians in treating cancer patients.

Foundation Medicine is taking its own approach to personalizing cancer treatments. While many previous firms have focused on developing tests to detect specific genes linked to likely outcomes of cancer treatments, Foundation Medicine is planning to use high-throughput DNA sequencing technologies to expose the plethora of genes and genetic variants in cancer genomes, according to Borisy. Borisy and Third Rock are betting that the future of cancer treatment will involve a single analysis of cancer DNA in guiding treatments, rather than multiple tests that screen for individual genes or groups of genes.

Today DNA sequencing is done primarily in research settings, with extremely limited clinical use. Borisy, however, says that it’s time to put this technology to work for people with cancer. “If many patients would benefit from this deep understanding, then there needs to be a way to take this from being a research tool to something that would be useful and meaningful and work in the routine practice of clinical oncology,” he says. “That has been the driving motivation and inspiration behind Foundation, and it’s quite clear that this is the way the world is going.”

The company’s exact strategy is evolving, according to Borisy, yet some details are clear. The firm plans to set up a central lab in the …Next Page »

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

AltheaDx, a San Diego-based developer of molecular diagnostics, reported yesterday that it had closed its $6 million Series A round of funding. Telegraph Hill Partners, of San Francisco, led the funding round. In September, AltheaDx filed papers with the SEC to report $3.6 million it had raised in the first-round financing. Magda Marquet, founder and co-CEO of AltheaDx, said in a statement yesterday that the fresh capital will support the firm’s partnerships with pharmaceutical companies to develop diagnostics that help predict whether a drug is safe for certain people.

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Ryan McBride wrote:

Third Rock Ventures, a Boston venture firm focused on life sciences investments, has filed papers with the SEC to raise a second fund. The proposed amount of the new fund is $400 million, yet the paperwork indicates that none of those funds had been raised as of the April 9 filing. Still, this is good news for early-stage biotech startups, which have been the sweet spot for Third Rock’s maiden fund of $378 million, closed in 2007.

Comments | Reprints | Share:  

 
 
 

Ryan McBride wrote:

Many people have probably never heard of some of the diseases that venture capitalists and drug company executives are swooning over lately. But regardless of how obscure a rare illness like X-linked hypohidrotic ectodermal dysplasia is, investments in developing drugs for such diseases are growing in popularity.

In Boston, both venture firms and pharma executives are getting in on the act. Third Rock Ventures has funded or formed three biotech startups in Cambridge, MA over the past two years that are developing drugs for rare genetic disorders (which are in some cases called orphan diseases). One of those companies, Alnara Pharmaceuticals, counts among its founders Christoph Westphal, a Cambridge-based executive who scouts for external business opportunities for London-based drug giant GlaxoSmithKline (NYSE:GSK).

These companies are ripping a page or two from the battletested playbook at Cambridge-based Genzyme (NASDAQ:GENZ). The company’s three best-selling treatments are for rare genetic diseases that affect fewer than 10,000 patients each. Still, Genzyme has been profitable because it can command hundreds of thousands of dollars per year for each patient treated with some of its drugs, and for years it has faced very little or no competition in these niche markets.

But the party’s getting more crowded nowadays. New York-based Pfizer (NYSE:PFE), the world’s biggest drug company, inked a deal announced in December to partner with Israel-based Protalix Biotherapeutics to develop and market Protalix’s rival drug to Genzyme’s top seller, imiglucerase (Cerezyme), an enzyme-replacement therapy for patients with Gaucher’s disease. Genzyme’s Gaucher drug brought sales last year of $793 million, way less than Pfizer makes from its top sellers like the heart pill atorvastatin (Lipitor). Despite the smaller markets for rare disease treatments, major pharma companies are investing in them as many of their multi-billion dollar drug franchises face greater competition from generic knockoffs.

“Pharma and bigger biotech players need to …Next Page »

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS