Author: Ryan McBride

Ryan McBride wrote:

Adrian Adams has resigned as the CEO and board member of Marlborough, MA-based drug maker Sepracor (NASDAQ:SEPR), according to the company and Japan’s Dainippon Sumitomo Pharma (DSP), which is buying Sepracor. Saburo Hamanaka has become chairman of Sepracor and executive officer of Dainippon. Dainippon, which announced its $2.6 billion buyout of Sepracor in September 2009, says that the merger of Sepracor and its subsidiary, Dainippon Sumitomo Pharma America, is expected to wrap up on April 1.

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Ryan McBride wrote:

Ray Stata, the co-founder and chairman of Analog Devices, is arguably the biggest name in semiconductors that Massachusetts has to offer. So it’s noteworthy that Stata’s Stata Venture Partners is leading a $7 million Series B round of venture capital for Providence, RI-based NABsys, which is developing a DNA sequencing technology that relies heavily on innovations from the semiconductor industry.

NABsys, which announced the second-round financing today, says that Stata has also joined the firm’s board of directors. The firm says that it plans to use the round to fund development of its DNA sequencing platform, which the firm hopes will significantly expedite the process of reading DNA chains for everyday healthcare uses. NABsys CEO Barrett Bready gave us some insight into his bold vision for the firm last year, when the firm announced the closing of a $4 million Series A round of funding led by Point Judith Capital.

Stata adds oodles of credibility to the Brown University spinout’s experimental “electronic, solid-state DNA sequencing method,” in which silicon chips are used for rapid electronic detection of DNA sequences. Stata, the founder of Needham, MA-based Stata Venture Partners, is a pioneer in the semiconductor industry through his more than four decades of leadership at Analog Devices (NYSE:ADI), a Norwood, MA-based maker of high-performance semiconductors and other technology that reported more than $2 billion in revenue last year.

“NABsys represents the merger of two industries which, until now, have been quite disparate: semiconductors and genomics,” Stata said, in a prepared statement. “I’m looking forward to working with the company’s leadership team and helping them commercialize what we believe will be a significant breakthrough in making DNA sequencing clinically relevant and widely available.”

Fast and inexpensive DNA sequencing is believed to be a key to improving how genomic information is used to treat patients, diagnose diseases, and aid in life sciences research. Last month we reported how the costs of sequencing an entire genome, in certain circumstances, have already been dramatically reduced from millions of dollars to thousands of dollars within the last several years.

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Ryan McBride wrote:

Activist investor Carl Icahn has increased his stake in Cambridge, MA-based biotech firm Genzyme (NASDAQ:GENZ) from 1.5 million shares in the fourth quarter of 2009 to 4.6 million shares as of last week, Bloomberg reported last Friday. Icahn did not comment on his enlarged stake in Genzyme, according to Bloomberg, but his previous buying sprees of biotech stocks have led to proxy fights with firms such as Cambridge, MA-based biotech Biogen Idec (NASDAQ:BIIB), San Diego-based Amilyn Pharmaceuticals (NASDAQ:AMLN), and drug developer Imclone Systems, which was acquired by drug giant Eli Lilly in 2008.

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Ryan McBride wrote:

When Don Kiepert became chief executive of Lantheus Medical Imaging about two years ago, he says, he took over a business that was looking down the barrel of a generic threat to one of its top-selling products—and whose operations had been largely overlooked by its previous owner, the drugmaker Bristol-Myers Squibb (NYSE:BMY).

Kiepert has attacked the first problem, generic competition to the firm’s technetium Tc99m sestamibi (Cardiolite) injections for medical imaging, by securing supply agreements with key customers and investing in marketing the product’s well-known brand. And last month, the North Billerica, MA-based company launched its latest imaging product, gadofosveset trisodium (Ablavar), a contrast agent used in diagnosing cardiovascular diseases, after paying $28 million for certain rights to the technology last May to the now defunct biotech firm Epix Pharmaceuticals, of Lexington, MA.

Yet Lantheus still faces major challenges. While the business’s roots date back to 1956, Lantheus is only a two-year-old company, and its name isn’t as well known among key physicians as Bristol-Myers is. (The company name was changed from Bristol-Myers Squibb Medical Imaging to Lantheus in January 2008, when private equity firm Avista Capital Partners, of New York City and Houston, purchased the business for $525 million from Bristol-Myers in a leveraged buyout.) Generic competition to the sestamibi product has eaten into the company’s revenue stream, but the CEO says that the total number of workers at the company today is about 740, just 10 fewer workers than  when Avista bought the business.

Lantheus does not publicly reveal its financial records, so it’s tough to know exactly how the business is performing. Like many companies purchased through LBOs, Lantheus must use a portion of its revenues to pay down the debt used to finance Avista’s purchase of the business. However, Kiepert says that the company is almost two years ahead of schedule in paying down its undisclosed debts from the buyout. And despite those debts, Avista has supported efforts at the company to invest in brining new products to market.

“We’re investing nearly …Next Page »

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Ryan McBride wrote:

Alexis Borisy is back in company-building mode. The former CEO of the drug developer CombinatoRx tells Xconomy that he has joined Third Rock Ventures in Boston as an entrepreneur in residence—and he’s already at the helm of a secretive new life sciences firm called Foundation Medicine.

Borisy gave few details on the startup, other than saying that the firm is focused on personalized medicine. He was more forthcoming, though, about his new role at Third Rock, whose team he quietly joined in early October, about four months after officially stepping down from his post as chief executive of Cambridge, MA-based CombinatoRx (NASDAQ:CRXX).

Borisy’s departure from CombinatoRx, a developer of combination drugs that he co-founded in 2000, was revealed in July when the company announced its merger with NeuroMed Pharmaceuticals. Borisy is officially a scientific advisor to CombinatoRx, but he says that he isn’t spending much time working with the company.

He and Third Rock partner Mark Levin have been discussing new entrepreneurial opportunities in biotech for the past year. Third Rock, which was launched in 2007 with a $378 million initial fund, is appealing to Borisy because the firm is focused on backing life sciences startups with the potential to fundamentally improve how certain diseases are treated, he says, and the firm’s members often take active roles at the companies in which it invests.

“When we founded Third Rock, we realized great companies take more than just great science; they require passionate people who share our commitment to making a difference for patients,” Third Rock partner Kevin Starr said, in an e-mail. “Alexis is one of those rare people that has the tools to take a disruptive idea and transform it into an exciting vision for a company that will have a significant impact. He has made a big difference in the firm already and we are all very excited to work with him on our next generation of companies.”

As an entrepreneur in residence, Borisy has an office at Third Rock’s Newbury Street headquarters and spends time with other members of the firm assessing and pursuing opportunities to start or invest in companies. And he places particular emphasis on pitching in as an executive of young portfolio companies, he says.

Borisy’s interests have recently focused on the field of …Next Page »

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Ryan McBride wrote:

Boston Scientific, the Natick, MA-based medical devices giant, says today that it plans to cut 1,000 to 1,300 employees or 8 percent of 10 percent of its total work force, as part of a company-wide restructuring initiative. The company (NYSE:BSX) expects pre-tax charges of $180 million to $200 million from the layoffs and restructuring plans, and it aims to reduce its annual budget by $200 million to $250 million during the next two years. There will be further updates on the restructuring plans in the firm’s fourth-quarter earnings report tomorrow, according to the company.

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Ryan McBride wrote:

[Updated 2/10/10 12:15 pm. See below] Genzyme and Isis Pharmaceuticals are making progress in the clinic with their cholesterol-lowering therapy mipomersen, a major potential moneymaker for both firms. Today the companies, which are collaborating on the development of the drug, report that the treatment significantly lowered the cholesterol of patients with a rare condition called heterozygous familial hypercholesterolemia in a Phase III clinical trial.

The study of 124 patients showed that the drug lowered LDL (bad) cholesterol by 28 percent in those who took the drug over a 26-week period, versus a 5 percent increase in cholesterol levels among those who were on placebo. The study also showed that the drug was associated with increases in liver enzymes called transaminases, which can indicate liver damage, yet tests showed that none of the patients suffered from liver dysfunction. (Luke covered how this liver issue, seen in past studies of the drug, has caused some jitters about the treatment on Wall Street.)

The study’s positive results are important because they keep hope alive for both Cambridge, MA-based Genzyme (NASDAQ:GENZ) and Carlsbad, CA-based Isis (NASDAQ:ISIS) that mipomersen could eventually be marketed for a much larger pool of patients than the population that the two companies are initially targeting. That first group of patients are those with homozygous familial hypercholesterolemia, a genetic disorder affecting one in a million people. In contrast, the trial being described today focused on patients with the more common heterozygous form of the disease, which affects one in 500 people, according to Genzyme.

The companies plan to file for U.S. and European approval of the drug to treat the smaller homozygous population in the first half of 2011, having already completed a pivotal trial of the treatment in those patients last year.

Still, there might be unanswered questions about the liver safety issue. Christopher Raymond, a biotech analyst for market research firm Robert W. Baird, wrote a note to investors today in which he speculated that some of the patients who did not complete this clinical trial due the liver side effects. noted that the liver issue remains a concern. “While full data is being withheld for a scientific meeting,” he wrote, “we expect a portion of these drop-outs were due to elevated liver enzymes, as Isis management was reluctant to completely dispel this concern during today’s conference call.”

Isis’s stock traded at $9.50 per share at 12:09 pm Eastern time, down 13.95 percent for the day. Shares of Genzyme stock traded at $54.49 at 12:09 pm, a price drop of less than 1 percent. [Editor’s note: The last two paragraphs of this story were added this afternoon to include a reaction quote from an analyst and to record stock price changes following this morning’s news about mipomersen.]

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Ryan McBride wrote:

There’s a quilt hanging on the wall at PatientsLikeMe, made with different patches of fabric from members of the firm’s online community of multiple sclerosis patients. “We have it hanging in our office because it represents so much of what our site is about—individual experiences that, when pulled together, give you a very powerful collective view of patients living with MS,” says PatientsLikeMe co-founder and president Ben Heywood.

The Cambridge, MA-based firm has stitched together a growing business by facilitating peer-to-peer interactions among patients on its social networking site, and selling anonymous data from its members to customers in the research and pharmaceutical markets. The number of patients on the site grew impressively from about 25,000 in December 2008 to more than 55,000 as of early this month (not like the eye-popping number of people on Facebook or Myspace, but significant for the healthcare field, according to Heywood). The jump in users and the overall size of its business has caused the company to expand its workforce to from 20 employees a year ago to 30 employees today, says Heywood.

Yet patient social networking sites remain in search of a solid footing in healthcare. Heywood says that PatientsLikeMe generates the kind of real-world data on the health of patients that can’t be found anywhere else. He might be right. Traditional clinical databases used to track the health of patients might not offer the type of personalized information that a patient would share among her peers on a site like PatientsLikeMe. The company’s big challenge, though, is to convince more paying customers of the value of the data its members generate. This challenge is compounded by the fact that the healthcare industry is generally loath to break from convention and adopt new technologies.

Nevertheless, PatientsLikeMe has provided services such as customized research on patient health and Web-based surveys for some of the top-20 pharma outfits in the world, Heywood says. The company doesn’t disclose the identities of all its customers, but does name the Swiss drug giant Novartis and the Google-backed personal genomics firm …Next Page »

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Ryan McBride wrote:

Solace Pharmaceuticals has quietly shuttered its office in Cambridge, MA, near the team of biologists and venture capitalists who formed the startup in 2006 to develop new treatments for pain, company CEO Eliot Forster confirmed for Xconomy.

The firm, which has raised $15 million in venture capital, is now operating from its remaining office in Canterbury, UK, Forster says. Three full-time employees in Boston were let go, but two of them have remained involved in the startup as consultants. The company now has four full-time employees and will continue its strategy of relying heavily on consultants and contract research organizations to support its operations, Forster says.

Solace closed its office at Four Cambridge Center in late November, after it learned during the previous month that its lead anti-pain pill failed in a mid-stage clinical trial, according to Forster. The drug, dubbed SLC022, was intended to treat a painful complication of shingles called post-herpetic neuralgia. But the Phase IIa clinical trial, which enrolled 154 patients, showed that the oral drug was not significantly more effective in treating pain than a placebo (which is commonly a sugar pill).

The drug was the most advanced of the company’s pipeline of small molecules for blocking cellular proteins involved in pain responses. The company’s founders include a team of prominent pain biologists led by Clifford Woolf, the director of neurobiology at Children’s Hospital in Boston, who discovered the role of a gene called “GCH1″ in pain. The gene encodes the production of a protein that is abundant in people suffering from pain, and the firm is researching molecules that can inhibit those proteins to ease peoples’ aches.

Woolf teamed with Boston’s PureTech Ventures in 2006 to form Solace. Forster, a former Pfizer executive, joined the startup as CEO when it closed its $15 million Series A round in April 2007, with investments from PureTech, Waltham, MA-based …Next Page »

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Ryan McBride wrote:

Medford, MA-based biomaterials provider Serica Technologies was acquired late last year by Allergan, the health care products company that makes onabotulinumtoxinA (Botox). Irvine, CA-based Allergan (NYSE:AGN) revealed the buyout in its earnings report yesterday, but did not disclose the acquisition costs. Some of the investors in Serica, which will operate as subsidiary of Allergan in Medford, include Needham, MA-based venture firm Prism VentureWorks, Ivy Capital Partners, of Montvale, NJ, and Morningside Technology Ventures, an investment group with founders from Hong Kong, according to a press release from yesterday.

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Ryan McBride wrote:

Allegro Diagnostics is on track to launch a major clinical trial of its lung cancer test this year after a long process, completed in October, of designing the goals of the study and submitting paperwork on it to the FDA, CEO Dan Rippy says.

The FDA has granted the Boston-based startup conditional approval to conduct an 800-patient study of its genetic test for lung cancer; the company expects to begin enrollment early this year. The hope is that the trial will lead to product clearance from the FDA, but Rippy says it’s too soon to predict when that may happen. Last year the company secured a $2.8 million Small Business Innovation Research grant from the National Cancer Institute to support the study.

The company also hopes to get permission, under a separate program run by the U.S. Centers for Medicare and Medicaid Services (CMS), to get paid to analyze samples with its lung cancer-screening technology in its own labs in the second half of 2010, Rippy says. Pursuing both paths at the same time could protect the firm if the rules for how such diagnostics are regulated change.

“It certainly has been a dynamic and evolving [regulatory] process,” Rippy says. “At the end of the day, Allegro wants to do world-class science, and so we want to and intend to be compliant with whatever regulations emerge.”

Allegro’s efforts are significant because the firm offers a new, genetic-based approach to detecting lung cancer that has the potential to spot tumors before they spread out of control. Allegro’s test screens cells from the lining of a patient’s airway for RNA molecules that show whether certain genes linked to lung cancer are overactive or underactive. The cells are collected as part of a procedure called a bronchoscopy, during which a scope is placed down a patient’s nose or throat to look in the lungs for suspicious tissues that could be cancerous. Bronchoscopy has historically yielded many false positives, according to Rippy; Allegro’s test is intended to boost its accuracy. Doctors also use X-rays, CT scans, and biopsies to detect lung cancer. Yet medical images can be misleading, and doing surgeries to gather tissue samples from the lungs is more invasive than Allegro’s method. (Rippy discussed some of this with Xconomy when he spoke to us back in March 2008.)

Molecular tests like Allegro’s are viewed as the next frontier for diagnosing lung cancer. Naturally, there’s competition in this field. For instance, …Next Page »

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Ryan McBride wrote:

Tepha, a Lexington, MA-based provider of polymers for medical applications, has raised $3 million of a proposed $7.4 million round of equity financing, according to an SEC filing. Company CEO Simon Williams was not immediately available for comment this morning. The filing does not list the firm’s investors in this funding. The company’s website says that some of its previous investors include Integra Ventures, Novartis Venture Fund, The Vertical Group, and Westfield Life Sciences Fund. Tepha is a spinoff of Cambridge, MA-based Metabolix (NASDAQ:MBLX), a maker of bio-plastics and other cleantech products.

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Ryan McBride wrote:

This may not be the bellwether for the IPO market that people were hoping for in the life sciences industry. Cambridge, MA-based Ironwood Pharmaceuticals priced its initial public offering of at least 16.67 million shares last night at $11.25 per share, far below the $14 to $16 range that the firm proposed last month.

Smart people were projecting the IPO of Ironwood, which is trading on the NASDAQ market under the symbol “IRWD,” to be a huge hit. The company is viewed as unique because, although it doesn’t have a product on the market, it has completed two pivotal trials for its lead drug linaclotide for chronic constipation. It’s also raised more than $300 million since it was formed in 1998. Historically, most biotechs don’t have that much going for them when they attempt an IPO.

Doug Fambrough, a general partner at Oxford Bioscience Partners in Boston, said this morning that he thinks it’s an overall positive development that Ironwood has moved ahead with its IPO, even at the lower price, rather than pulling the deal altogether. Ironwood would have left a bad taste in the mouths of investors on Wall Street if it had nixed the maiden public offering, he added. (Luke spoke to Fambrough and other industry leaders last week amid the positive buzz about this IPO.)

“For the first half of the story, it’s gone pretty well for the [life sciences] industry,” Fambrough said. “The second half of the story is how well Ironwood’s stock trades over the next two weeks.”

Still, there’s no avoiding the fact that public investors pushed back on the proposed $14 to $16 per share price range for this deal. The $11.25 share price values the company at $1.07 billion, as opposed to the more than $1.5 billion market cap it would have created at $16. Because Ironwood is more mature than most biotechs that attempt IPOs, it’s unlikely that other life sciences firms at earlier stages of development will fetch as high a price as Ironwood in their initial public offerings, according to Fambrough.

We’ll be tracking how Ironwood’s stock trades in the coming days to cover the second half of this story.

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