Author: Ryan McBride

Ryan McBride wrote:

This week I spoke with veteran biotech executive Una Ryan at her office about her strategy for raising money to advance the cause at the Harvard spinout Diagnostics For All. So it was no surprise to spot her just a few hours later at the McGovern Institute for Brain Research at MIT, networking with accomplished academics and powerful industry types.

Ryan, who began work as CEO of the nonprofit diagnostics firm in early January, needs to network to execute her plan to begin providing its paper-based diagnostic tests to patients in poor countries by the end of this year, because it’s going to require a lotmore money than the two-year-old firm has in the bank today. The good news is that the firm’s co-founder, renowned chemist George Whitesides, along with his collaborators, have finished much of the engineering required to manufacture the nonprofit’s postage stamp-sized devices cheaply and easily. (The nonprofit also gained early acclaim for being a 2008 winner in the prestigious MIT $100K Entrepreneurship Competition.)

Despite the low cost of the technology, it’s going to cost between $2 million and $5 million to begin providing the firm’s diagnostics to the developing world, in part because its products will need additional testing and operational support. It’s an urgent matter, too, since the firm’s tests could catch signs of lethal liver damage in hundreds of thousands of HIV/AIDS patients in poor countries whose medications can have undiagnosed side effects. There are also opportunities to expand use of the technology for patients with diseases such as tuberculosis, malaria, and diabetes.

Therefore, Ryan is leading a multi-pronged effort to raise money at the firm; there is a link on its website where people can make donations online. “It worked for …Next Page »

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Ryan McBride wrote:

The chairman of Germany-based Merck KGaA told the Boston Globe this week that the company plans to move the headquarters of its U.S. chemical business from New Jersey to Billerica, MA, following his firm’s deal to purchase Billerica-based life sciences firm Millipore for $7.2 billion. The Massachusetts-based division will be called EMD Millipore, Merck chairman Karl-Ludwig Kley told the Globe during a visit to the Bay State this week. Millipore (NYSE:MIL), a provider of life sciences research and manufacturing products, employs about a quarter of its global work force, or approximately 1,675 people, in Massachusetts and New Hampshire, the Globe reports.

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Ryan McBride wrote:

Isis Biopolymer, a Providence, RI-based developer of drug-delivery devices, has raised $3 million in equity financing, according to an SEC filing. The document does not list the investors in the round, and company CEO Emma Durand was not immediately available for comment this afternoon. The company says on its website that it was founded in 2006 and has developed a patch—embedded computer chips, thin-film batteries, and other technology—to deliver drugs through the skin.

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Ryan McBride wrote:

Stemgent, a provider of biological materials for life sciences research with offices in Cambridge, MA, and San Diego, reports this morning it will invest $4.5 million over the next three years in the Dundee, Scotland-based biotech firm Ubiquigent. Ubiquigent is producing biological products developed by the Scottish Institute for Cell Signalling at the University of Dundee. Stemgent is handling initial marketing of the fledgling Scottish biotech’s products in the U.S. market.

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Ryan McBride wrote:

When a rare disease strikes one of their own, some families take it upon themselves to find a cure. Unsatisfied with treatment options for the genetic disorder cystic fibrosis, the Flatleys have become one of those families.

John Flatley, a Braintree, MA, real estate developer, is spearheading his family’s effort to find a cure for one of his family members and others with cystic fibrosis through a new nonprofit called CFRx. The nonprofit is being funded by the Flatley Foundation, which was founded by Flatley’s late father, Thomas Flatley, the legendary real estate tycoon and philanthropist.

The mission of CFRx is to discover a potential cure for cystic fibrosis, which causes life-threatening lung and digestive problems, John Flatley tells Xconomy. He says he doesn’t want to publicly identify which member of his family has the disease, to protect that person’s privacy. The nonprofit itself has operated under the radar since he launched it in November 2008 with the help of Richard Fitzpatrick, a former scientist from the vaunted Cambridge, MA-based biotech firm Genzyme.

The nonprofit’s operations reflect some of the shrewd business philosophies of Flatley’s father, John Flatley says. Thomas Flatley, whose personal wealth was estimated to be $1.3 billion by Forbes in 2005, was known for being involved in most all details of his real estate empire. John Flatley has applied some of the business lessons he learned from his father at his own real estate firm, John Flatley Company, and now at his drug-discovery nonprofit. Rather than rent expensive labs, he says, he’s built out his own labs with used equipment in the Schrafft Center building in Charlestown.

“The philosophy that I learned from my father is that when it’s your own money, you want to stay …Next Page »

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Ryan McBride wrote:

CombinatoRx has garnered its first drug approval. It’s a milestone for the Cambridge, MA-based drug developer, even if the path the company took to reach this point isn’t the one its founders had mapped out when they launched the company in 2000.

The FDA has approved the pain drug hydromorphone HCL (Exalgo), which is an extended-release tablet taken once a day for people with moderate to severe aches and pains, the company (NASDAQ:CRXX) reports today. The firm took on U.S. development of the drug through its December merger with Vancouver-based Neuromed Pharmaceuticals. In other words, the pain tablet is not a product of CombinatoRx’s own drug-discovery system, which uses computers to find novel treatments based on synergistic combinations of other drugs.

The approval has earned CombinatoRx—which still has a Vancouver office—a $40 million milestone payment from the healthcare products giant Covidien (NYSE:COV). Covidien, which has its corporate offices in Mansfield, MA, acquired U.S. rights to the pain treatment from Neuromed last year and is handling all marketing of the drug through its Mallinckrodt unit. CombinatoRx will get royalties on drug sales from Covidien, which plans to begin selling the product in the first half of this year.

CombinatoRx’s work on this pain drug is largely over, since Covidien is now responsible for all marketing and post-approval studies of the drug. Also, the ALZA unit of Johnson & Johnson (NYSE:JNJ), which licensed U.S. rights to the drug to Neuromed in 2007, is in charge of manufacturing supplies of the product that will be sold by Covidien in the U.S. CombinatoRx’s next closest drug to the market is its combination therapy for arthritis, which is in mid-stage clinical development.

The approval has given CombinatoRx’s stock a shot in the arm. According to Google Finance, the stock was up 45 cents, or 40.5 percent, to $1.56 per share in pre-market trading this morning.

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Ryan McBride wrote:

Zafgen, a Cambridge, MA-based startup focused on new obesity treatments, has raised $8.1 million in a third closing of its $28 million Series B round, a company spokeswoman confirmed this afternoon. The funding was revealed today in this SEC filing. The company, which has now raised $30 million, received the fresh capital from previous backers Third Rock Ventures in Boston and Atlas Venture in Waltham, MA. Zafgen CEO Tom Hughes told Luke earlier this year that the firm isn’t exactly sure how its drugs work, after a study showed that its earlier hypothesis that its molecules cut off the blood supply to fat tissues turned out be wrong.

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Ryan McBride wrote:

What do doctors think about electronic health records? That’s a question at the heart of a newly announced partnership between Athenahealth and Sermo, according to the companies’ press release this morning.

Athenahealth (NASDAQ:ATHN), the Watertown, MA-based provider of Internet software and services for medical practices, is tapping Cambridge, MA-based Sermo’s online community of physicians to get their views on electronic health records (EHRs) and other issues impacting their practices. Financial terms of the partnership weren’t disclosed.

This deal shouldn’t come as a surprise. Sermo CEO Daniel Palestrant told Xconomy last month that part of his doctors-only social networking firm’s sales growth in early 2010 was because of new business from electronic health records vendors. Athena, meanwhile, has been pushing for doctors to adopt its electronic records product, athenaClinicals, as U.S. physicians deploy records systems to qualify for $17 billion in Medicare incentives beginning in 2011.

Athena, which is known mostly for managing billing and collections for physician practices with an online system called athenaNet, added its EHR application to the system in late 2007. As of the end of the third quarter of 2009, there were 1,270 physicians using Athena’s EHR. By comparison, companies that have been in the EHR business much longer than Athena say they each have tens of thousands of physicians using their electronic health records software.

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Ryan McBride wrote:

More big companies are giving electronic health records a go. The Cambridge, MA-based nonprofit Dossia says that two of its founding members, computer chip giant Intel and mail system provider Pitney Bowes, are offering its electronic health records system to at least some of their workers.

The next big test will be how many Intel (NASDAQ:INTC) and Pitney Bowes (NYSE:PBI) employees actually opt to store their personal heath data in Dossia’s secure online records system. After all, Dossia CEO Colin Evans told me last year that his nonprofit will depend on subscription-fee revenue from employers that offer its electronic records to workers. Last month Vanguard Health Systems said it would offer Dossia records to its workers, and the healthcare company as well as Intel and Pitney Bowes say they are initially making the records system available to select groups of employees.

Dossia is not free, like some competing personal health record systems such as Google Health and Microsoft HealthVault. Yet Dossia could save its corporate clients, which are grappling with mounting healthcare costs, significant amounts of money. One of the theories behind personal electronic health records is that they empower people to live healthier lifestyles, preventing illnesses that drive up the costs of caring for them. Another goal is to use the online records to share patient’s health data with their doctors, reducing costs from redundant medical exams that doctors sometimes order when they don’t have access to patients’ original test results.

“The true power this technology can create is a user experience that lives up to the promise of helping people optimize their health with real-time, easy access to their health information and engaging applications,” said Tami Graham, director of global benefits design at Santa Clara, CA-based Intel, in a statement.

Dossia’s Evans told me in an e-mail that he expects Intel, where he was previously employed in the digital health group, to roll out the Dossia records system to all of its employees by the end of 2010. Vanguard is expected to do the same. Meantime, his nonprofit says that Stamford, CT-based Pitney Bowes will extend the system of all of its employees in April, and Evans told me the company will also promote the records to employees who receive care at its on-site clinics. There are now tens of thousands of people with Dossia personal health records, most of whom are employees of retail powerhouse Wal-Mart, which was the first company to adopt the technology in 2008.

With Intel and Pitney Bowes, Dossia has now launched its records system with four of the 10 companies that founded the group and have put a total of $15 million in startup funding into it. In November, Xconomy provided some of the background on Dossia, whose core technology comes from Children’s Hospital in Boston, as well as the considerable technical challenges the organization has faced in its three-year history, delaying the deployment of its system at companies.

“Dossia now has a stable [technology] platform that will support an ecosystem of applications,” says John Moore, a healthcare IT analyst for Chilmark Research in Cambridge. “Its [system is] now ready to be rolled out to its founding members.”

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Ryan McBride wrote:

Ra Pharmaceuticals has big-named backers and a co-founder of Transkaryotic Therapies (now part of Shire) serving as CEO, but not much else is known about the secretive startup. Yesterday the Boston-based firm reported in an SEC filing that it had raised $10.3 million of a planned $27.6 million round of equity financing.

The company is being incubated at the Boston office of Morgenthaler Ventures, where Morgenthaler entrepreneur-in-residence Doug Treco is leading Ra as its CEO, according to the venture firm’s website. The regulatory filing for the financing does not specify who invested in the company, but it does say that its board of directors includes Treco, Morgenthaler partner Jim Broderick, Novartis Option Fund managing director Lauren Silverman, and New Enterprise Associates partner Ed Mathers. Calls placed to a Treco and Mathers’ office at NEA were not immediately returned this morning.

Doug Treco

Founded in 2008, according to the filing, Ra Pharmaceuticals appears to have money in the bank and a CEO in Treco who has had considerable success in the difficult drug-development game. Treco co-founded and served as senior VP of research and development of former Cambridge, MA-based Transkaryotic (TKT), which was acquired by Irish drugmaker Shire for $1.6 billion in 2005. He was part of a team at TKT that developed biotech drugs for rare diseases, such as the Hunter syndrome treatment idursulfase (Elaprase), which is now a core product for what has become the Massachusetts-based human genetic therapies unit of Shire.

We’ll try to track down more information on this exciting startup and update this story as needed.

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Ryan McBride wrote:

A flood of new genetic data generated by advanced DNA sequencing systems has landed some life sciences researchers in a bit of information-management pickle. But this problem is a major opportunity for GenomeQuest and its competitors in the business of proving DNA analysis software.

GenomeQuest aspires to do for biologists what Google did for people searching the Internet, according to CEO Ron Ranauro. The Westborough, MA-based company has seen an increase in demand for its software and technology, which life sciences companies use to analyze and manage the genetic information they use, say, during the development of new drugs for cancer or diabetes.

According to Ranauro, his firm is having success because of a confluence of trends in genomic research and the way drug developers and research institutions use computers to do this work. For one, ever-faster and cheaper DNA sequencing systems—developed by companies such as Roche (which bought 454), and San Diego-based Illumina (NASDAQ:ILMN)—are enabling researchers to generate genetic data at unprecedented scales and speeds. Meantime, life sciences firms are looking to cloud computing to help trim their capital equipment costs and overhead needed to maintain internal IT systems.

GenomeQuest has developed the capability to enable drug companies and other research outfits to analyze genetic information in the cloud. This means that a researcher with an Internet connection can use the software firm’s Web-based software to, say, identify the genes underlying a specific disease. (The firm also sells its software to companies that can install and operate it on their own internal servers.) GenomeQuest maintains its own database of genetic sequences, aggregated from other sources such as the NIH’s gene database kept by the National Center for Biotechnology Information and patent records that include DNA sequences. The company’s browser enables its customers to search its database and compare the genetic information from their own research to the firm’s online repository.

“Research is undergoing the digitization that you see in other industries,” Ranauro says. “We call it …Next Page »

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Ryan McBride wrote:

Marathon Technologies has socked away more cash, about five months after announcing the arrival of new CEO Jim Welch. The Littleton, MA-based maker of fault tolerance software has wrapped up a third closing of its Series B round of venture capital, bringing the total funding in the round to $13.5 million, according to a regulatory filing.

Welch wasn’t available for comment at his office late Tuesday afternoon. Marathon had raised a total of $7 million in the financing round by August, with backing from Waltham, MA-based venture firms Atlas Venture and Longworth Venture Partners, as well as Sierra Ventures, of Menlo Park, CA. In September, Wade talked to Welch, a former IBM executive, about the CEO’s plans for finding additional markets for the firm’s software after a period of focusing on technology development at the company.

“Today our tech is very much sold and used as a point solution,” protecting Windows servers, Welch told Wade. “But the opportunity in the enterprise is obviously much more broad. I want to see us protecting Exchange servers or fetal heart monitors or whatever it may be. We need to continue to expand our capabilities for a heterogeneous world.”

Marathon’s software is designed to provide almost seamless transitions of computing workloads from downed servers to operational servers. In 2008, the firm launched software for switching workloads in a similar fashion between virtual servers and formed a partnership with Ft. Lauderdale, FL-based Citrix Systems (NASDAQ:CTXS), a major provider of virtualization software. Marathon also has an existing technology partnership with Redmond, WA-based Microsoft (NASDAQ:MSFT).

We’ll be watching for Marathon’s next big move.

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Ryan McBride wrote:

Aveo Pharmaceuticals, a Cambridge, MA-based developer of cancer drugs, has set a price range of $13 to $15 per share for its proposed initial public offering, according to an SEC filing. The firm says it expects to offer 7 million shares in the IPO, in addition to up to 1.05 million shares that would be sold to cover over-allotments. At $15 a share, the public debut could bring in a total of $120.75 million, according to the company. The company—which estimated it would raise $86.3 million in the IPO when it first revealed its plans to go public in December 2009—plans to list its stock on the NASDAQ stock market under the symbol “AVEO.”

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Ryan McBride wrote:

When I went to visit LifeImage CEO Hamid Tabatabaie at his firm’s headquarters in Newton, MA, last week, one of my main goals was to learn more about the breadth and depth of the health IT startup’s ties with storage giant EMC (NYSE:EMC). That question was quickly answered when EMC senior VP Joel Schwartz walked into Tabatabaie’s office at the start of my interview with the CEO and said a casual goodbye to Tabatabaie.

Reality check: Senior executives like Schwartz from big tech firms don’t typically walk the hallways of startups unless they’ve got serious business with the smaller firms. And it turns out that LifeImage and Hopkinton, MA-based EMC are planning to announce a new cloud-based service for sharing medical images over the Internet at the annual HIMSS (Health Information and Management Systems Society) meeting in Atlanta early next month, according to Tabatabaie. This virtual drop box is targeted for use in trauma centers, and so will be called “Time,” which is short for Trauma Image Management and Exchange. Orthopedic surgeons, for example, could use their Time accounts to accept and share digital images of bone fractures. The system consists of software that LifeImage has built to run on the EMC “Atmos” cloud storage and computing platform.

I wasn’t able to talk to Schwartz about Time (in part because he ducked in and out of Tabatabaie’s office quite fast). But Tabatabaie provided some insights about where his firm and EMC are going with the project. For starters, it’s part of an overall effort at Life Image to address the lack of secure and accessible means for doctors and patients to share and transfer digital medical images, which are typically stored on CDs that patients hang onto and/or within the confines of individual IT systems at hospitals and other clinical centers. From a strategic perspective, Tabatabaie says that his firm and EMC are anticipating significant growth in the use of cloud technology for storage and sharing of medical images; the number of radiology exams done in the U.S. is projected to reach 1 billion per year by 2012.

“Healthcare imaging data is the largest health data [market] in size,” Tabatabaie says. “If anybody would want to own that [market], it should be EMC because they are the owners of both the storage and security technologies, they are the leaders.”

To hear Tabatabaie tell it, it sounds like EMC’s interest in partnering with his firm complements the Hopkinton firm’s existing dominance in the business of providing hospitals with storage technology, specifically with networked systems that replace the tapes and CDs that clinical centers previously used to store imaging records. (EMC doesn’t break out sales by sector in their 2009 annual report, but it’s no secret that the company’s technology is widely used in hospitals and that the healthcare market is of strategic importance to the firm.) Yet public cloud storage, which essentially enables users to rent online storage on a pay-as-you-go basis, hasn’t yet caught on in healthcare and other industries, due in large part to security concerns.

Still, the conventional wisdom is cloud computing, in all its forms, isn’t going away. The day might come sooner than some people think when hospitals begin to warm up to storing important data such as patients’ radiology images and records in the cloud. And it appears that EMC, in partnership with Life Image, isn’t waiting around for that day to come.

Tabatabaie tells me that EMC was involved in the last company at which he served as chief executive, Amicas. Boston-based Amicas (NASDAQ:AMCS) provides software for managing digital medical images and other information in hospitals. EMC has had success in equipping hospitals with the infrastructure to support the kinds of image-management systems that Amicas sells. EMC was a venture investor in Amicas, according to one online report. And EMC’s Schwartz served on the Amicas board of directors during four of the six years that Tabatabaie was CEO of the software company, which was between 1999 and 2005. Schwartz is also a member of the board at Life Image, according to federal documents. (I guess that the lesson here for startups is that to hook up with a partner with the industry clout of EMC, it helps to have had success in previous relationships with said partner.)

Even with the EMC partnership, LifeImage faces a growing number of competitors. At next month’s HIMSS conference, San Diego-based healthcare software firm DR Systems says that it plans to publicly unveil its own cloud-based medical image sharing service dubbed “eMix,” a beta version of which has already been deployed at a few medical centers. Also, AcceleRAD, an Atlanta-based provider of medical imaging software, has launched a website called “seeyradiology.com” to enable patients to share their digital medical images such as CT scans, X-rays, and ultrasound records with their doctors.

While competition in the cloud market is heating up, LifeImage is making progress in gaining customers for the enterprise version of its software, called “Lila” or the LifeImage Local Appliance, part of which was originally developed at Massachusetts General Hospital (MGH) in Boston. The software provides hospitals with software to upload images on incoming patients’ CDs to inboxes on their own IT networks, where physicians can view and share the records. There are now 20 hospitals or healthcare provider organizations that have either signed on to adopt the startup’s software or are about to sign on, including Baystate Medical Center in Springfield, MA, MGH, and Continuum Health Partners in New York. (We covered the economic argument for the lila software in our initial story about LifeImage last year.)

Tabatabaie says that he expects there will be more and more competitors in online image sharing in years to come. LifeImage is trying to foster an open dialogue with its competitors through its Image Sharing Forum, an online community that Tabatabaie says he hopes will lead to the development of common standards among all the vendors in this business. Common standards, he says, are key to enabling image-sharing services to be easily integrated into a multitude of hospital IT systems. Also, he wants people with LifeImage accounts to be able to share and accept images from people with similar online accounts from other vendors, another reason to have the standards in place.

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Ryan McBride wrote:

Carl Icahn is now officially making moves on the Boston area’s two biggest biotech companies. After boosting his stake in the slumping Cambridge, MA-based firm Genzyme, Icahn is now seeking representation on its board, according to the company. Icahn has been making similar plays for control at Genzyme’s neighbor, Biogen Idec, for years.

Icahn has nominated four candidates, including himself, for election to Genzyme’s (NASDAQ:GENZ) board of directors at its annual meeting, slated for May 20. His nominees include portfolio manager Alex Denner and Harvard Medical School professor Richard Mulligan—both of whom won seats on Biogen’s (NASDAQ:BIIB) board last year—as well as Steven Burakoff, a professor at Mount Sinai School of Medicine.

Genzyme, one of the largest biotech firms in the world, is ripe for a proxy battle like the one that could break out if the biotech fights Icahn’s nominees, whom the company said in today’s announcement it would evaluate. All nine of the firm’s board seats are up for re-election this spring, opening the door for Icahn to seize control of a significant share of the struggling company’s board of directors. Genzyme plans to announce its own nominees for the nine board seats in March, said company spokesman Bo Piela.

“This is a pretty straight forward filing on [Icahn’s] part,” Piela said. “He has not yet made his intentions known.”

It’s true Icahn hasn’t outlined specific changes he’d like to make at Genzyme, yet the company has been taking steps to make changes of its own after a tough 2009. Genzyme’s sales slipped from $4.61 billion in 2008 to $4.52 billion last year, during which contamination at the firm’s Allston Landing plant in Boston caused supply shortages of two of its key enzyme-replacement therapies. These and other troubles at the company have made Genzyme and its chairman and CEO Henri Termeer the target of much criticism.

“Our actions demonstrate that we are open and responsive to shareholder input, and we welcome a constructive dialogue with Mr. Icahn,” said Termeer, in a statement.

Icahn appears to have a hunter’s instinct for troubled biotechs. He’s boosted his stake in Genzyme stock from 1.5 million shares to 4.8 million shares, as of December 31. This follows his success in gaining two board seats last year at Biogen, the world’s largest maker of multiple sclerosis drugs, which he has criticized for underperforming its peers in the biotech industry. Last month he nominated three new candidates for Biogen’s board. Icahn and Eastbourne Capital Management succeeded last year in gaining two board seats at San Diego-based Amylin Pharmaceuticals, forcing out the firm’s chairman and an independent director.

Genzyme has already cut a deal with another major investor, Relational Investors, to defer Relational’s request for a board seat under condition that the company improve its performance. We’ll stay alert for any demands that Icahn brings to the embattled biotech.

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