Tuesday, April 7, 2009

Westphal on the Life Sciences Innovation Paradox

I had a chance to sit down for a few minutes with entrepreneur and ex-VC Christoph Westphal at the Biotech Business Development Conference he organized today at the Charles Hotel. Mostly, we spoke about Westphal's assessment of the current environment for life sciences in Boston.

We're in the midst, he said, of "an unusual and profound downturn" in which big companies will get smaller, and some small companies will disappear.

On the VC industry: "They haven't done a good job of returning capital over the last ten years." Why? Too much focus on what's perceived as safe: specialty pharma, "retreads," and in-licensing. When venture capitalists do well, he suggested, it's by investing in innovative stuff -- and here, as examples, he offered up three companies he has been involved in starting (Momenta, Alnylam, and Sirtris). "People do pay for disruptive technology," he said.

But the paradox of today's climate, Westphal suggests, is that while big pharma companies seem to be saying they're still willing to pay for innovation -- drugs that are truly differentiated -- there seems less willingness of the part of investors to take risks on "big vision" companies. "There's less money available, and more contingencies on taking that money," Westphal said. The hurdles to getting money are much higher today than any time in the past ten years, he believes.

But while the screen is incredibly fine right now, the few companies that can get funding will be able to attract great people, he said, encounter fewer competitors in the marketplace -- and presumably see a payday at some point down the road.

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Tuesday, March 24, 2009

Why Boston Just Might Be the Center of the Universe (At Least for Now)

Here's a talk that's not to be missed... April 16th at the Boston Public Library.

Juan Enriquez is giving a presentation titled "Financial Crises, Technology, and Why Boston Might Just be the Center of the Universe (At Least for Now)." It's part of the Ford Hall Forum series that Suffolk University puts together, and it's free.

Ever since his book, "As the Future Catches You" was published, Enriquez has been one of the most thoughtful explainers of the significance and future direction of the life sciences field. In this talk, he'll make the case that life sciences will be the "dominant language and economic driver of this century," giving Boston an edge that's ours to lose.

Enriquez was also a speaker at TED earlier this year.

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Saturday, August 16, 2008

Know Your Genome

Apparently the only company that will sequence your entire genome is located in Cambridge.

The cost? $350,000. (That's $150,000 more that it costs for Virgin Galactic to fly you into space.)

The company, Knome, was the focus of my Boston Globe column earlier this week. Is there any benefit, in mid-2008, to having your DNA decoded?

From the piece:

    These are the rip-roaring Wild West days for companies peddling genomic information to consumers, offering insights about the twisted nucleic acids that make us who we are - and also those trying to bring down the cost of sequencing an entire genome.

    Some believe the large-scale gathering of genetic information will remake the way healthcare is practiced and shift its focus from treating disease and chronic conditions to staving them off. Others, such as genetics researcher David Altshuler of the Broad Institute, liken it, at least in the near-term, to the recent rage in whole-body CT scanning for healthy people. Genomic analysis may identify potential problems that don't ever become real maladies, but generate all sorts of unnecessary diagnostic tests and procedures.

Here's the video -- a chat with Knome CEO Jorge Conde.

Wired has a wonderful profile of Knome founder George Church (written by Thomas Goetz) that begins...

    George Church is dyslexic, narcoleptic, and a vegan. He is married with one daughter, weighs about 210 pounds, and has worn a pioneer-style bushy beard for decades. He has elevated levels of creatine kinase in his blood, the consequence of a heart attack. He enjoys waterskiing, photography, rock climbing, and singing in his church choir. His mother's maiden name is Strong. He was born on August 28, 1954.

    If this all seems like too much information, well, blame Church himself.

Side note: Conde pronounces the name of the company, Knome, like it rhymes with "gnome." Church pronounces it "know-me." Conde says with a smile that Church must be more influential, since he hears far more people pronouncing it the Church way.

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Wednesday, May 28, 2008

Boston's Biotech Tycoon

If you want to understand the story behind one of Boston's biggest biotech success stories, Genzyme Corp., Boston Magazine offers this great profile of CEO Henri Termeer, by Geoff Gagnon.

A few months ago, I was talking with some biotech execs who observed that there has never been an obvious #2 executive at Genzyme to succeed Termeer, who is 62. (Several possible successors have come and gone.)

But Gagnon's article contains an interesting detail: Termeer's mom is still alive, in Holland, at age 93, offering him advice. So succession may not exactly be a near-term issue for Genzyme.

Gagnon writes:

    At 93, [Mrs. Termeer] still keeps a close eye on her son, and on his company. (She's become a frequent visitor and a sort of mascot at Genzyme's plant in Belgium, not far from where she lives.) The two speak at least once a week and the conversation is rarely laden with idle pleasantries. Mrs. Termeer has a point when she calls, and she tends to get right to it. The impulse is the same when the family gathers for its annual fall reunion along the Dutch coast, in the province of Zeeland. Tradition dictates that the Termeers each rise at the table to regale the clan with a little speech. Without fail, the matriarch's chats are the most, well, weighty. "We all cringe a little when she speaks," Termeer says. "There's usually a big moral angle to it. She's quite serious."

    So Termeer wasn't terribly surprised by the call he received a few years back. His mom sounded agitated. She had read about Dutch patients who were relying on free infusions of an experimental precursor to Myozyme to treat their Pompe disease, a rare disorder that shrinks sufferers' muscles, eventually crippling their heart and lungs. The news suggested that Genzyme had plans to stop the program. These were Termeer's countrymen, and such apparent callousness was red meat for the Dutch politicians who denounced him in parliament. "She wanted answers. She wanted to know what I was going to do," Termeer says.

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Wednesday, April 23, 2008

Wow: Glaxo Pays an 84 Percent Premium for Sirtris Pharma

This one will be an HBS case study before long: how do you take some very early academic research from Harvard and generate $720 million of value in just four years?

GlaxoSmithKline is paying that amount, in cash, for Cambridge's Sirtris Pharmaceuticals, which develops drugs based on the chemical resveratrol. Resveratrol is an ingredient found in red wine, and it may help fight diseases related to aging. Even more fantastically, it seems to extend lifespan in mice.

Sirtris has no drugs on the market and no revenues. It was founded in 2004, and went public last year. Its most advanced drug candidate, SRT501, aims to treat diabetes, but it just completed Phase 1b trials, the results of which were announced in January.

The biggest question about this deal -- not addressed in any of the stories -- is, how long are Westphal and his key team members required to stick around after this acquisition? I wonder whether they'll have the desire, or the incentives, to stick around long enough to transform the company's early promise, which was clearly attractive to Glaxo, into actual drugs.

Here's the NY Times coverage ... and the story from today's Boston Globe. Forbes notes that the deal is part of a trend of foreign pharma companies buying US firms because of the weakness of the dollar. Bloomberg ran an earlier piece on the company, last November, 'Sirtris may fight diseases of age.' Xconomy has a Q&A with Sirtris exec Michelle Dipp, who handles corporate development and PR for the company.

I wrote about Sirtris and one of its predecessors, Elixir Pharmaceuticals, last November in the Globe.

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Monday, December 31, 2007

Endy heading to Stanford ... Big loss for MIT

I wrote about synthetic biology pioneer Drew Endy back in 2005, after his group's work had been covered in Wired.

Just saw this piece in the San Francisco Chronicle, which notes that Endy is hopping from MIT to Stanford at the end of the 2007-2008 academic year. Big loss for MIT.

Endy was also a co-founder of the Cambridge company Codon Devices.

(Photo credit: Leah Fasten)

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Tuesday, December 4, 2007

Stem Cell Start-Up Fate Gets $12 Million

Fate Therapeutics hopes to use stem cells to fix damaged tissue; the start-up just received $12 million in A round funding from ARCH Venture Partners, Polaris Venture Partners, Venrock, and OVP Venture Partners. The company's scientific founders hail from the University of Washington, Harvard, Stanford, and the Scripps Research Institute.

Fate says it'll have offices in both Massachusetts and Washington (the company was incubated in the Seattle offices of ARCH), but until a CEO is hired, they won't have a decision about where the HQ will be.

From the Seattle Times coverage:

    In Seattle "we're able to attract money to great ideas," [ARCH founding partner Robert] Nelsen said. "The hardest thing is finding the right team and the right CEOs."

    Fate will work on drugs that cause dormant adult stem cells to rebuild damaged tissue, as well as drugs that reprogram mature adult cells into stem cells that can repair ailing organs.

    The therapies could help treat Down syndrome, Alzheimer's and Parkinson's diseases, as well as repair tissue after heart attacks, infections or transplants. Stem cells could also help fight certain types of cancer.

Mass High Tech adds:

    The firm aims to develop chemical-based, or small molecule, drugs intended to "awaken" stem cells in the body to combat diseases and regenerate tissue. Its other molecules would reprogram adult cells to an embryonic state. None of the firm's treatments would be derived from embryonic stem cells, the company says.

    Other local notables involved in Fate Therapeutics include Massachusetts Institute of Technology professors Robert Langer and Ram Sasisekharan, both of whom serve on the firm's scientific advisory board.

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Tuesday, November 27, 2007

TVM revamps Boston office, opens in New York

TVM, the VC firm based in Germany but with offices in Boston, is adding a general partner, Marios Fotiadis, to the Boston office, and promoting Jens Eckstein to general partner. Fotiadis has done stints at Advent International and SG Capital Partners, and also served as CEO of Achillion Pharmaceuticals. Eckstein is on the boards of Ascent Therapeutics and Magen BioSciences, and served as an advisor to Sirtris Pharmaceuticals.

TVM also recently opened a New York office. The company's backgrounder:

    TVM Capital, founded in 1983, is one of the first venture capital firms formed in Germany and an early entrant into the U.S. market in 1986. Since inception TVM Capital has raised more than €1.3 billion ($1.6 billion) in six fund generations and has established itself as a leading technology investment group in Europe and the U.S. TVM Capital funds have made investments in more than 235 information technology and life science companies where innovation, effective management and sound financial backing have enormous impact on company growth.

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Tuesday, October 16, 2007

What's Andora Up To?

Bob Langer's lab at MIT seems to be going through a particularly fertile period -- I heard tonight that two Langer Lab companies are currently out talking to VCs.

Ryan McBride of Mass High Tech had a fun piece last Friday about another recent Langer Lab spin-out, Andora, basically speculating about what they may be up to. The company raised $4 million earlier in the year.

Andora (no Web site yet) is in Kendall Square, and were until recently was cohabitating with Tempo Pharmaceuticals, another Polaris-backed start-up. Avid surfer Amir Nashat is running the company. Oddly, Jon Flint from Polaris, not usually a life sciences investor, is on the board.

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Wednesday, October 3, 2007

MGH Researchers Push to Reduce Pain

This Boston Globe piece is worth reading, even if only for the wonderful historical parallels: anesthesia was invented at Mass General Hospital in 1846, and more than 150 years later, researchers there are still working to make it better.

From Colin Nickerson's story:

    Scientists at Harvard Medical School and Massachusetts General Hospital today described a new "targeted" approach to anesthesia that appears to totally block pain neurons, but doesn't cause the numbness or partial paralysis that is the unwelcome side-effect of anesthesia used for surgery performed on conscious patients.

    If approved for use in humans, the method could dramatically ease the trial of giving birth -- by sparing women pain while allowing them to physically participate in labor. It could also diminish the trauma of knee surgery, for instance, or the discomfort of getting one's molars drilled. Not only would there be no "ouch," there would be none of the sickening wooziness or loss of motor control that comes from standard forms of "local" anesthesia.

Interesting tidbit: their approach relied in part on capsaicin, the ingredient that makes chili peppers hot.

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Monday, September 24, 2007

Instead of Going Public, Adnexus Shacks Up with Bristol-Myers Squibb

Bristol-Meyers Squibb is paying $430 million in cash for Waltham-based Adnexus Therapeutics, which filed an S-1 statement just last month. The company planned to raise $86 million in an IPO, on top of $76 million it had already raised in VC money.

We included them earlier this year on our list of the ten most-promising New England life sciences start-ups, in the second edition of The Convergence Guide. (The list was compiled by Steven Dickman of CBT Advisors.)

From the AP report:

    The companies said the acquisition of Adnexus will help advance Bristol-Myers's role in biologics and includes an early stage trial for cancer treatment candidate Angiocept. Angiocept is designed to be a so-called anti-angiogenic drug, or one that tries to stop cancerous tumors from developing new blood vessels.

    The deal "is an important step in accelerating the strategic transformation of our pharmaceutical business to a biopharma business model," said Bristol-Myers Squibb Chief Executive Jim Cornelius, in a statement.

Among the local VC firms that backed Adnexus are Polaris Venture Partners, Atlas Venture, and Flagship Ventures. The company did a Series C round of $15.5 million just before filing for its IPO.

Update: Tuesday's Globe has the full story.

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Wednesday, September 19, 2007

Splitsville for Alnylam and Merck

Cambridge-based Alnylam Pharmaceuticals and Merck had a big-money partnership -- up to $120 million in milestone payments.

As of today, it's done with, and Alnylam CEO doesn't seem too depressed, saying the split is in Alnylam's best interests.

What do you think is happening here? Is it entirely related to Merck's acquisition of Sirna Therapeutics, an Alnylam rival that is also working on RNA interference? (Merck bought Sirna for $1.1 billion last November.) IE, why does Merck need Alnylam as a partner if they now own Sirna?

Here's an old description of the Alnylam/Merck collaboration from the Alnylam Web site (since removed):

    Alnylam and Merck are in a collaboration to develop RNAi therapeutics across a potentially broad spectrum of disease areas. Originally forged in 2003, the companies amended the terms of the collaboration in 2006 to provide Merck with a more active role in the development of RNAi therapeutic products, and Alnylam with an opportunity to receive accelerated R&D funding and the potential for significant milestones and royalty payments on commercialized products resulting from the collaborations.


    Alnylam and Merck have initiated a pre-clinical program to develop RNAi therapeutics for spinal cord injury. The program is focused on the Nogo pathway, which plays a key role in preventing regeneration of nerves after injury, such as spinal cord injuries. An RNAi therapeutic that inhibits this pathway could potentially promote neuronal cell regeneration and reduce or prevent paralysis caused by such injuries.

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Friday, September 14, 2007

Third Rock Caps First Fund at $378 Million

Third Rock Ventures, the newest life sciences venture firm in town, has finally put out the press release announcing its new fund: $378 million.

The IN VIVO blog talks to partner Kevin Starr about the firm's focus. From that post:

    The six general partners—including former Millennium CEO Mark Levin—expect to hold key management positions at these start-ups during the first year or so. They’ll negotiate the deals, set up the shop, do the hiring, etc., etc. to assure these companies get off to the right start. “We’ll be the start-up team,” says Kevin Starr, the former chief operating officer and chief financial officer at Millennium. The partners will serve CEOs, heads of science, whatever is necessary “to make sure these companies are built the right way, have the right cultures, hire the right people, and do the right partnerships. We are going to get involved in a hands-on way.”

And Forbes also has a piece, which is pretty critical of Millennium as an investment and as a company. Matthew Herper also talks about Third Rock's strategy:

    Part of the new venture fund's approach will be to closely manage start-ups. Other VCs are backing dozens of companies a year, but Third Rock will only look at a few biotechs, each getting a few tens of millions of dollars. At that rate, it will take the fund several years to invest all the money that it has.

    Another strategy: Third Rock won't raise $50 million or $100 million worth of venture capital for a single biotech before bringing the company to the public markets, private equity or selling out to a larger drug maker. These deals are just too dilutive. Better to follow the Millennium example and start generating revenue through partnerships early.

Last month, I noted in the Globe:

    Greylock Partners of Waltham offered an assist in getting Third Rock into orbit, investing some of its own money and introducing Levin to several investors; Greylock's Bill Helman was one of the original investors in Millennium. Levin himself was a VC with Mayfield Fund in California before starting Millennium.

    "Life sciences is an area of pretty mediocre returns for venture capital," says Helman. "They have a strategy for breaking out of that." Levin didn't respond to calls seeking comment.

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Sunday, August 26, 2007

Today's Globe column: 'Why biotech CEOs need to think like Steve Jobs'

Today's Globe column deals with the importance of being able to sell a big vision in life sciences -- especially when a start-up is trying to pioneer a new area of science.

Among the CEOs I mention as "poster child" communicators are several alumni of Millennium Pharmaceuticals, including John Maraganore of Alnylam, Steve Holtzman of Infinity, and Alan Crane of Tempo Pharmaceuticals. Then you've got Christoph Westphal of Sirtris, and Josh Boger of Vertex. All these guys have elements of Steve Jobs' ability to communicate something ambitious and exciting -- something that is sorely missing among tech companies in New England right now.

The video clip features Alan Crane explaining how Tempo is using nanotechnology to engineer a new kind of cancer drug.

Finally, a few quotes that didn't make it into the edited piece....

“Someone who is a great storyteller can win people over with relatively little substance,” says Michael Gilman, formerly executive vice president of research at Biogen Idec. “But other people tend to be rubbed the wrong way by it.”

“The scientist in me is never going to make assertions that I don’t think I can back up with data,” says Gilman. “That’s just the way I’m wired. If you promise too much and disappoint, it’s not good for you in the long run.” Gilman founded Stromedix, Inc. of Cambridge in 2005, licensing a product that Biogen Idec had started to develop. It’ll begin trials later this year.

“Companies undergo a brutal and challenging transition when they’re forced to be evaluated on the merits of their products,” says Steven Dickman, CEO of the consultancy CBT Advisors. Dickman worked with Alnylam in its early days...

That transition hasn't quite happened yet for all of the companies I mention in the piece; while they've got drugs in clinical trials, none are yet on the market.

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