Author: Ryan McBride

Ryan McBride wrote:

For a while last year, it looked like investors had lost faith in NxStage Medical. But the Lawrence, MA-based company (NASDAQ:NXTM), which makes portable dialysis machines for kidney failure patients, found its stride last May when it struck a financing and partnership deal with Japanese medical supplies firm Asahi Kasei Kuraray Medical.

The Asahi deal included a $40 million loan that enabled NxStage to pay off more expensive debts of about $30 million to GE Capital. Asahi also agreed to market NxStage’s kidney dialysis system in the Asian market under its own brand, among other facets of the agreement between the two firms. And since the deal, NxStage’s stock has been booming. The stock price hit its nadir at $1.90 per share just days before the Asahi deal was announced on May 18, and by last Friday, the stock closed at $8.11 per share.

NxStage is blazing a new trail by providing the first system that makes hemodialysis in the home a practical option for people whose kidneys can no longer remove toxins and water from their blood. It’s been hard work for the company to convince the healthcare providers to adopt home-based hemodialysis as opposed to the standard practice of having patients travel to centralized dialysis treatment facilities. The company also competes for the attention of doctors with industry giants such as Fresenius and Baxter International.

Nevertheless, NxStage has seen its sales grow consistently in recent years, in large part because more and more healthcare providers have warmed up to its portable hemodialysis machine, called System One. In November, the company reported that its revenue for the first nine months of 2009 was $108.2 million, up 16 percent from its $93.1 million in revenue from the same period of 2008. Yet the company’s sales of System One, which was launched after it was cleared for the U.S. market in 2005, haven’t been enough to make the business profitable.

“We’ve had a very consistent and predictable performance across multiple metrics,” says CEO Jeff Burbank, “Having done that for eight consecutive quarters now, that’s starting to build some confidence.”

No company before NxStage had succeeded in bringing a practical device for home hemodialysis to market. (Wealthy people had installed hulking hemodialysis machines like the ones used in clinics in their homes for decades, but those systems require professional clinical assistance as well as plumbing and electrical infrastructure upgrades that are impractical for most people with kidney failure.) The NxStage system, which is about the size of an old-school computer monitor, features several key innovations. One of them is a disposable cartridge loaded with the blood and fluid circuits. Burbank says that precise fluid management is a key to the overall function of the system. The system also had to be easily operated by patients, or a family caregiver, for them to use it in their homes.

Indeed, the company is years ahead of its competitors in providing home-based hemodialysis. Still, Burbank is keeping track of his neighbors to the north at DEKA Research and Development. That is the prolific inventor Dean Kamen’s Manchester, NH-based contract R&D firm, which is developing a home hemodialysis system on behalf of Deerfield, IL-based Baxter (NYSE:BAX). Baxter has been pumping …Next Page »

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Ryan McBride wrote:

Don’t underestimate those brainy types riveted to their laptops at coffee shops in Harvard Square, because they could be managing the development of a potential breakthrough drug. That’s what I was thinking last week during a dinner hosted by Xconomy at a Harvard Square venue, where we discussed the virtues and limitations of virtual business models in biotech.

Bob told our guests—consisting of biotech executives, venture capitalists, attorneys, and consultants—that their comments would be kept off the record (with one notable exception within the group). So I’ll present some of the key ideas from the dinner without identifying the sources. However, I will say that our out-of-town guest, Duane Roth, shared an interesting critique of the problems with traditional product development in life sciences and how a type of virtual business model is at least part of the solution.

Roth, who is the CEO of the nonprofit industry group CONNECT in La Jolla, CA, ignited debate and thoughtful comments with his prescription for the ills of current R&D models. Many of the thoughts he shared are explained in greater detail in a paper he co-wrote for the Kauffman Foundation, which made the paper available online on January 25. He said that fully integrated companies with R&D, manufacturing, and marketing capabilities have fallen short on delivering enough new products to justify their large budgets. For example, Roth’s paper notes that FDA drug approvals have declined as R&D budgets skyrocketed. To back this, the paper cites data from the merchant bank Burrill & Company that show that in 2004 the industry spent $47.8 billion in research while the agency approved 36 drugs, while in 2008 research spending had swelled to $65.2 billion, but only 24 drugs were approved.

Roth argued that one solution is the creation of “product definition companies,” which are largely virtual firms that license technology from research institutions funded by the government. Such companies would have only a small group of full-time experts to manage the business, and they would rely on a network of professional services firms such as contract research outfits to handle the R&D and clinical work required. The companies would essentially operate in “the cloud,” he said. And rather than trying to take their drugs into expensive late-stage clinical development, the product definition company would sell a product to, say, a pharmaceutical company, which would then advance the product to commercialization.

“The new model is about moving products, not …Next Page »

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Ryan McBride wrote:

BG Medicine has matured since it pulled its previous plans for an initial public offering in January 2008. The Waltham, MA-based developer of molecular diagnostics revealed a new proposal this morning to raise $86.3 million in an initial public offering to bring its first test, for heart failure, to patients in the U.S. and Europe.

In October, the company garnered European clearance to sell its Galetin-3 diagnostic product, which identifies the galetin-3 protein in blood to predict whether a patient is at risk of heart failure. European sales have since begun. The next big hurdle will be whether the FDA, which denied the firm’s application to start selling the test last year, will look favorably on an application submitted to the agency in December, according to the firm. The company is hoping to get the green light to begin marketing the test in the U.S. by the second half of this year.

The IPO plan, which the company described in a new regulatory filing today, would provide BG Medicine with some much-needed cash. The company, which was founded in 2000, had racked up a deficit of $78.6 million as of December 31, 2009, according to the filing. The firm finished last year with $10.3 million in the bank, and its auditors have said that its available cash will support its operations through June 2010, or the second quarter of the fiscal year. (Of course, BG Medicine was able to reel in $40 million from its investors after it scrapped its initial plans for an $80 million IPO two years ago.)

Who stands to gain the most from a BG Medicine IPO? Cambridge, MA-based Flagship Ventures is the company’s largest stockholder with a 44.4 percent stake. Its other major shareholders include Gilde Europe Agribusiness Fund (14.1 percent), GE Pension Trust (7.4 percent), Legg Mason Capital (7.4 percent), and Small Cap World Fund (7.4 percent), according to the regulatory filing. CEO Pieter Muntendam has a 3.6 percent percent stake.

Heart failure affects about 5.8 million people in the U.S. and is one of the top causes of death in the country, according to American Heart Association figures cited in BG Medicine’s filing. In Europe, there are a similar number of patients affected by heart failure, a condition in which the heart fails to efficiently pump enough blood through the body to keep organs functioning, according to the company. The firm has an agreement with health products giant Abbott Laboratories (NYSE:ABT) to include its galetin-3 test one of Abbott’s diagnostic instruments. Yet while there’s a huge potential market for the company’s galetin-3 test, health insurers would have to agree to provide reimbursement for the test to make it a commercial success.

Luke provided a great overview of BG Medicine’s business in summer 2008, explaining how the company got its start by providing its molecular tests for drug companies to find out which patients were good candidates for their clinical trials.

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Ryan McBride wrote:

The season of proxy battles at Biogen Idec (NASDAQ:BIIB) is upon us. Billionaire investor Carl Icahn and his affiliates have sent word to Cambridge, MA-based Biogen that they plan to nominate three additional people for election to the board of directors at the company’s annual meeting this year, Biogen says.

Two of Icahn’s nominees are alumni of cancer drug developer Imclone Systems, of which Icahn and his affiliates took a majority of shares in 2006.  Thomas Deuel, a former board member at Imclone, is a professor who focuses on cancer research at the prestigious Scripps Research Institute in La Jolla, CA. Richard Young is an MIT biologist whose lab at the White Institute of Biomedical Research studies the role of small RNA in gene transcription. And Eric Rowinsky is the former chief medical officer at Imclone.

This slate has been introduced as Biogen looks to replace its CEO, James Mullen, who announced early this month that he would be retiring in June. Icahn, who controls nearly 5.6 percent of Biogen shares, could gain far more significant influence on the company’s board at a pivotal time if his nominees take three of the four seats open for election this year. Biogen’s board has formed a four-member committee to lead a search for a new CEO, and one of those four search committee members is company director Alex Denner, who is one of the two nominees from Icahn’s slate to be elected to the board last year. (Luke analyzed Icahn’s potential impact on filling board vacancies at Biogen last month.)

Another proposal that Ichan is making, for the third year straight, is to amend Biogen’s bylaws to fix the number of board seats at 12. Putting a cap on the number of company directors could be viewed as a longer-term measure to gain control of the board. It’s conceivable that, after the next election, Icahn’s people would occupy nearly half of the company’s board seats, giving him considerable influence over decisions, putting him in striking distance of gaining control of majority of the board in subsequent years.

Icahn’s been a major proponent of overhauling research priorities and trimming expenses at Biogen to lift the price of the company’s stock, which he says has underperformed compared with other similar stocks in recent years.

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Ryan McBride wrote:

[Corrected 1/28/10, 3:15 pm. See below] Alnara Pharmaceuticals has received a big financial boost at a critical time. The Cambridge, MA-based biotech firm says it has nabbed $35 million in a Series B funding round as it puts the finishing touches on the paperwork it needs to complete before asking the FDA for permission to sell its first product, an enzyme-replacement drug for patients with cystic fibrosis.

The firm’s new investor, MPM Capital, led the second-round financing, which included contributions from Bessemer Venture Partners, Frazier Healthcare Ventures, and Third Rock Ventures. Ashley Dombkowski, a managing director at MPM, is joining the board at Alnara as part of the funding round. With the new capital, the company has now raised $55 million since it was founded in 2008.

Alnara has ambitious plans for how to use its latest infusion of cash. By the end of the first quarter, the firm plans to file a new drug application to get U.S. approval of liprotamase, a pancreatic enzyme-replacement therapy that helps patients with cystic fibrosis to digest fats, proteins, and carbohydrates, according to Alexey Margolin, the company’s co-founder and CEO. The money will be needed to complete the application and prepare for the potential commercial introduction of liprotamase, which could hit the U.S. market as early as the fourth quarter of this year.

Robert Gallotto, the chief operating officer of Alnara, said that the firm expects to rapidly capture a significant portion of the estimated $400 million annual market for pancreatic enzyme replacement therapies in the U.S.

Liprotamase could provide big benefits to both cystic fibrosis patients as well as Alnara’s investors. Pancreatic enzyme treatments have been used for decades by patients whose pancreases are unable to produce enough of certain enzymes that people need to break down and digest certain fats and proteins. Traditionally, the enzymes are harvested from pig pancreases, and patients swallow a few capsules with their meals. Alnara, on the other hand, makes liprotamase with microbial enzymes in a process that is similar to how synthetic insulin is made. [Editor’s note: The original version of this paragraph erroneously described liprotamase as a “genetically engineered copy of a natural human enzyme,” though it is a recombinant microbial enzyme that is not a copy of human enzyme, according to a spokeswoman for Alnara.]

Alnara believes its treatment has several advantages over those made with pig enzymes. For one, the engineered, or recombinant, enzymes don’t carry the same risk of harboring viruses that the pig enzymes do. (However, Alnara acknowledges this safety risk is largely theoretical, because there have been no reported viral contamination in the previous treatments with pig enzymes.) Also, liprotamase can be taken in much lower doses than existing treatments, because the treatment is designed to prevent the digestive system from degrading its enzymes before they are needed. The company says that its research shows that patients need about five capsules of liprotamase per day, compared with 20 capsules per day for people who take competing treatments. The dominant competitor in this market is …Next Page »

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Ryan McBride wrote:

Clarus Ventures, a Cambridge, MA-based venture fund, has invested $17 million in the surgical hydrogel developer Neomend, as part of the Irvine, CA-based company’s $30 million Series D funding round. Neomend, which develops its hydrogels to seal surgical wounds, also attracted investments in the round from Novo Ventures, Prospect Venture Partners, Sanderling Ventures, and Vivo Ventures, according to the company’s press release.

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Ryan McBride wrote:

Millennium is playing the role of global development and marketing partner to Seattle Genetics, something that would have been tricky for Cambridge, MA-based Millennium to nail before it became the cancer R&D arm of Japanese drug giant Takeda Pharmaceutical Company in May 2008.

Last month, Millennium closed a major collaboration deal with Seattle Genetics (NASDAQ:SGEN), buying exclusive rights to sell the Bothell, WA-based biotech firm’s experimental drug for Hodgkin’s and other lymphomas in all markets outside the U.S. and Canada. (Luke covered this deal in Seattle last month.) The deal shows how Millennium, with the financial backing and global reach of its parent Takeda, has risen in the ranks of potential collaborators in the biopharmaceutical game.

Takeda is looking to Millennium to lead the expansion of its oncology business, which already features Millennium’s big-selling multiple myeloma drug bortezomib (Velcade). In addition to the Seattle Genetics deal, Millennium executives played a key role last spring in doing due diligence for and negotiating Takeda’s buyout of Irvine, CA-based IDM Pharma, says Dan Curran, vice president of corporate development at Millennium. This week, Takeda is beginning European sales of mifamurtide (Mepact), a bone cancer therapy developed by IDM, he noted.

In Seattle Genetics, Millennium has found a partner with which it has a long history and deep understanding of its technology. Millennium initially began a research collaboration with the Washington biotech in 2003 to evaluate its “empowered” antibody drugs, according to Curran. That relationship was elevated last March, when Millennium paid Seattle Genetics $4 million up front to license the empowered antibody technology for cancer drug development. As the name suggests, the drugs are souped-up antibodies. The firm’s technology links antibodies, which are ideal for homing in on proteins on the surface of cancer cells, to toxins that are intended to destroy cancer cells.

Millennium knows what it is like to be in Seattle Genetics’s shoes, trying to bring its first drug to market and relying on a larger corporate partner in order to tap foreign markets. In fact, Millennium partnered with a unit of the healthcare products giant …Next Page »

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Ryan McBride wrote:

Life sciences companies nabbed nine of the 10 largest private equity deals in the Boston area in 2009, a year when investors were called on to fund biotechs and medical devices companies in late stages of product development, according to a recent survey by Dow Jones VentureSource.

The survey data indicate that private equity investors such as venture firms are pumping money into companies that may have considered the public markets in better times. For example, Woburn-based BioVex, which is developing a viral drug for skin cancer, closed one of the largest private financings in the Boston area last year, after scrapping plans for a $45 million initial public offering in 2006.

However, lithium-ion battery maker A123Systems, based in Watertown, managed to raise big bucks in private equity in the first half of 2009 and then follow up that performance with a $380 million IPO in September. Also, Cambridge-based cancer drug developer Aveo Pharmaceuticals, another firm that made the top-10 list, filed regulatory papers in December with the SEC to raise more than $86 million in an IPO.

You can find out more about all the companies on the list and their plans for the future by following the links below.

The list:

A123Systems, Watertown, MA — $99.9 million (Series F)

BioVex, Woburn, MA — $70 million (Series F)

ConforMIS, Burlington, MA, — $50 million (Series D)

Proteon Therapeutics, Waltham, MA — $50 million (Series B)

Virdante Pharmaceuticals, Cambridge, MA — $47.75 million (Series A)

Aveo Pharmaceuticals, Cambridge, MA — $45 million (Series E)

Synageva BioPharma, Waltham, MA — $45 million (5th Round)

Aileron Therapeutics, Cambridge, MA — $40.15 million (4th Round)

EpiZyme, Cambridge, MA — $40 million (Series B)

Still River Systems, Littleton, MA — $33 million (4th Round)

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Ryan McBride wrote:

Cubist Pharmaceuticals has grown into one of the big success stories in biotech industry of the past few years, based almost entirely on the sales of a single product. The Lexington, MA-based company’s big hit is an intravenous antibiotic for deadly infections called daptomycin (Cubicin). Even though this has propelled Cubist into profitable territory, the company’s (NASDAQ:CBST) stock price has been flat for more than four years amid concerns on Wall Street about potential threats to its antibiotics franchise.

Last week, I visited the company’s headquarters and met with CEO Michael Bonney and discussed the successes and challenges he faces at Cubist. This month the company announced 2009 revenue of $562.1 million, a 30-percent jump from the year before. Revenues have grown rapidly every year since the market debut of daptomycin in 2003. But Bonney was clear that the company doesn’t plan to rest on its laurels, and the firm is taking more aggressive measures than in previous years to bring a second commercial product to market. (The company also sells an antibiotic called meropenem on behalf of AstraZeneca in the U.S., but that agreement brought Cubist only $22.5 million in revenue last year.)

Indeed, analysts have criticized the company’s lack of an encore to its success with daptomycin. Bonney acknowledged that the company’s critics have a point, and that he’s tackling it now.

“I think we could have been a little more aggressive at pipeline building earlier than we started to,” Bonney said. “It’s always a fine balancing act between [profitability] and how much you are going to spend, and there’s no formula that I’ve found in any textbook that says this is how you do it. But I do think, with the benefit of hindsight, that is something we could have done differently.”

Cubist has more than just its pipeline to worry about. It generates 93 percent of its revenue from daptomycin, a compound used in hospitals to treat lethal MRSA (Methicillin-resistant Staphylococcus aureus) infections and other bugs. And while analysts say daptomycin has potential to reach $1 billion in peak annual sales, that is no sure thing. Generic drug maker Teva Pharmaceutical has plans to market a cheaper generic copy of the drug before Cubist’s patents for the product expire between 2016 and 2019. Cubist plans to prove in its pending lawsuit against Teva that its patents protect its lead antibiotic from generic competition.

Cubist’s problem isn’t exactly unique in the biotech game; there are a number of mid-sized drug developers whose success hinges largely on one product. A couple of those companies include Cheshire, CT-based Alexion Pharmaceuticals (NASDAQ:ALXN), which gets all of its sales revenue from one product, eculizumab (Soliris), a treatment for a rare blood disorder called paroxysmal nocturnal hemoglobinuria, as well as Emeryville, CA-based …Next Page »

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Ryan McBride wrote:

A little more than a year ago, American Well was still waiting for its first customer to launch its Web-based system, which enables real-time interactions between patients and doctors over the Internet. Then on January 15, 2009, after much anticipation, the system went live for the Hawaii Medical Service Association, the Hawaii franchise of Blue Cross Blue Shield.. It’s a day that American Well CEO Roy Schoenberg recalls fondly, the day when the now 4-year-old firm’s vision of online healthcare became a reality.

I spoke to Schoenberg at length last week to find out what his firm had learned about how patients use the 90-employee company’s technology, and also to get a preview of what’s in store for the firm and online healthcare in 2010. In general, the company’s well-greased PR machine has been very careful about when, what, where it shares information about its operations and the use of its technology. (And in large part due to the novelty of patients seeking care online, there have been no shortage of stories about American Well and its exploits.) But Schoenberg shared some interesting tidbits about where the company is headed that, while general in nature, provided a glimpse at what to expect in the year ahead.

To quickly recap the American Well story, the company made a big splash back in June 2008 when it announced that it had landed its first deal with the group in Hawaii and struck an agreement with Microsoft to integrate American Well’s system with Microsoft HealthVault, the online personal health records system. The company has since sold its system to the Blue Cross Blue Shield of Minnesota; OptumHealth, a unit of private health insurance giant UnitedHealth Group (NYSE:UNH); and then TriWest Healthcare Alliance, a Phoenix-based health plan for military personnel and their families. While four health plans isn’t many customers, Schoenberg has argued that his firm has found adopters of its system at an exceptional rate in the context of the healthcare industry, which often lags others in the implementation of new technology. (The CEO made this case last June in an interview with Wade.)

With the system in use for just over a year, Schoenberg has a wealth of information about the practice of online care. In fact, he dropped a few interesting facts about the use of online care during our interview: the majority of patients that have used the firm’s system have been women; slightly more than 50 percent of the online doctor visits are consults for allergies, aches, colds, and other routine ailments; and physicians from some 23 medical specialties are providing care on the system, to name a few things. Though the CEO declined to share traffic figures for the company’s system, he said that there are now hundreds of physicians offering treatment to tens of thousands of regular patient users of the online care platform.

I’ve saved what I view as the most interesting info from my talk with Schoenberg in the following Q&A.

Xconomy: How does American Well plan to further integrate its technology into the healthcare system this year?

Roy Schoenberg: One thing that has been illuminating to us is the fact that we originally thought that the system was going to be used for medical care proper. And we now see that the system is being used in behavioral health, for example, which we never envisioned. TriWest is using the system for behavioral health. I know that UnitedHealth [via OptumHealth] is going to try it as well on their system. We’re seeing applicability of the system in other areas, such as the use of the system to project additional services into the retail pharmacy. That is something you are going to see in 2010. And there are other areas such as use of the system in care management.

What is also true is that all these things are going to have an impact on what we do in 2010. We are no longer at the point where we are developing on whiteboards. This is a very real system that has a lot of traffic that enables us to learn and extend it in places where the use shows us there is value. We have very ambitious plans for expanding the application of online care immediately in 2010. One of these areas is the introduction of a …Next Page »

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Ryan McBride wrote:

The FDA has told Cambridge, MA-based Genzyme (NASDAQ:GENZ) that the agency plans to make a decision on its application for approval of Pompe drug alglucosidase alfa (Lumizyme) made in 4,000-liter batches by June 17, according to the company. The agency decided not to approve the treatment in November, citing lingering issues at Genzyme’s Allston Landing plant in Boston, where the drug is no longer manufactured. Genzyme plans to manufacture the treatment—which is marketed outside the U.S. as Myozyme—at its facility in Geel, Belgium.

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Ryan McBride wrote:

Amag Pharmaceuticals (NASDAQ:AMAG), a Lexington, MA-based firm with a lead product for patients with chronic kidney disease, announced yesterday that it plans to sell 3 million shares of common stock in a public offering. Additionally, the firm is allocating 450,000 shares for underwriters to cover potential over-allotments. The company’s stock traded at $49.03 per share at 3:23 pm ET today.

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Ryan McBride wrote:

Ironwood Pharmaceuticals, a Cambridge, MA-based firm with a lead product candidate for chronic constipation, said in an SEC filing that it has set the price of its proposed initial public offering at $14 to $16 per share. The firm is aiming to sell 16.7 million shares of common stock in the IPO, which would make the stock sale worth up to $266.7 million—a good deal more than the initial $172.5 million estimate that the firm gave when it first disclosed plans for the maiden stock offering in November 2009. The company may also sell an additional 2.5 million shares to cover potential over-allotments. Plans are to trade the stock on the Nasdaq Global Market under the symbol “IRWD.”

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Ryan McBride wrote:

Knome, the personal genomics startup co-founded by leading Harvard geneticist George Church, is navigating rapid change in its business. The Cambridge, MA-based launched in 2007 to make whole-genome sequencing and analysis a personal luxury item rather than just a marvel of modern science, but now it’s facing more competition on the sequencing side of its business and a dramatic decline in fees for its bread-and-butter consumer services.

About two years ago the startup announced that it was charging its first three wealthy customers $350,000 to sequence their entire genomes and then have its scientists interpret and analyze the data for each person. A year or so ago the firm dropped the price for that service to around $100,000, due in large part to a sharp decrease in the cost of sequencing. Last June, that price was then dropped again, to $68,500, where it has stayed, says Jorge Conde, the firm’s co-founder and CEO.

If you had your entire genome sequenced just five years ago, you might have been considered a pioneer on par with the first handful of astronauts who ventured into outer space. But there have since been a series of technological advances in tools used to map DNA, innovations that have brought down the price of whole genome sequencing from about $1 million dollars per genome a few years ago to less than $5,000 today.

Conde says the falling costs of genomic sequencing are a positive development for human health and science. He’s even confident that the lower costs of sequencing opens up a much larger market for Knome than possible at its original $350,000 price tag. Still, the company operated profitably in its early days when its small staff of around five full-time employees served clients who paid six figures for their services. Today, the company is trying to find a way to get back in the black with a larger staff of closer to 20 people and a premium service that costs the same as a fancy Mercedes rather than a nice condo near Kendall Square.

“I think the biggest challenge for us has been in clearly communicating the difference between sequencing and interpretation,” Conde says. He adds that while the price of whole-genome sequencing has fallen sharply, the costs of employing teams of scientists to interpret the data have not decreased nearly as much. The firm is spending more money today on salaries, given that its staff is larger than it was two years ago.

Conde says that the greatest value that his firm brings customers is in the analysis and interpretation of genomic data, for which it employs geneticists, bioinformatics experts, and clinicians. (Indeed, co-founder Church, in addition to heading the non-profit Personal Genome Project, stays involved in the business as a chief scientific advisor.) The actual genomic sequencing is handled by the startup’s partners at the Beijing Genomics Institute in China and SeqWright, a genomic analysis lab in Houston, TX. Indeed, plain genomic sequencing has become a commodity business, with firms such as Mountain View, CA-based startup Complete Genomics advertising whole genome sequencing for less than $5,000 per genome.

Fairly or unfairly, Knome is also often compared with the personal genomic analysis services of firms such as Foster City, CA-based Navigenics, and Silicon Valley startup 23andMe, which was started by a team that includes Google co-founder Sergey Brin’s wife, Anne Wojcicki. Both firms offer DNA tests, not sequencing, for $1,000 or less to tell people whether they have genes for certain diseases. 23andMe also gives customers clues about their ethnic roots based on the genes detected in the firm’s genotyping service. (Rather than sequencing a person’s genome to uncover all the genes in their DNA, those firms get a person’s DNA from their saliva and use test chips to find out whether the person has certain genes for diseases related to diseases or heredity. Conde notes that such DNA tests don’t uncover many genes or variants that give people a more complete picture of their genetic makeup, making it difficult to predict whether a person is at risk of developing, say, heart disease.

Even for those who do get their entire genome sequenced, there are limits to what scientists can tell them about the data because there are vast regions of the genome that are not yet fully understood. But that is expected to change as the U.S. government’s investment in genetic research leads to new discoveries about what the reams of genetic data really mean for human health. The National Human Genome Research Institute, a division of the NIH, received a windfall of …Next Page »

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Ryan McBride wrote:

Waltham, MA-based research products giant Thermo Fisher Scientific (NYSE:TMO) has agreed to pay $145 million in cash to acquire venture-backed Ahura Scientific, according to a press release. The proposed deal is expected to close later this quarter, and it’s big a potential payday for Wilmington, MA-based Ahura’s venture backers such as Arch Venture Partners, which has operations in Boston and Seattle, Waltham, MA-based Castile Ventures, California’s Fuse Capital, and GF Private Equity Group, of Durango, CO.

Ahura, which says it has raised $29.5 million in venture capital since it formed in 2002, is a provider of handheld optical devices that use Fourier-transform infrared spectroscopy to enable customers in the security and pharmaceutical markets to rapidly detect chemicals and metals. Thermo Fisher wants to make the Ahura product line part of its portfolio of handheld analyzers. Ahura had an estimated $45 million in product sales in 2009, and Thermo Fisher has agreed to provide Ahura’s investors potential payments based on sales of Ahura products in 2010, in addition to the initial $145 million in cash.

“This combination brings together both companies’ leading technologies for portable chemical and elemental analysis, allowing us to create a powerful tool set for our customers that enables laboratory-quality analysis in the field,” said Marc Casper, president and chief executive of Thermo Fisher, in a statement.

Ahura, which now has 120 employees, will be integrated into Thermo Fisher’s analytical technologies business if the transaction goes through as planned.

Keith Crandell, a co-founder and managing director for Arch Venture Partners in Chicago, led the firm’s investment in Ahura. Nina Saberi, a founder and managing general partner of Castile Ventures, serves on the board of directors at Ahura.

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Ryan McBride wrote:

Cardiorobotics, a Middletown, RI-based developer of robotic devices for medical and non-medial uses, has raised $5 million in equity investments, according to an SEC filing. The startup, which was founded by researchers at Carnegie Mellon University and the University of Pittsburgh, announced in summer that it closed a $11.6 million Series A round of venture capital to develop its robotic probes for surgical applications. Xconomy wrote in depth about Cardiorobotics’s technology and its first-round financing in August.

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