VentureBeat

(UPDATED at 11am PT on Sunday, 8/26/07: See below.)

Featured companies: Clinical Data, Epidauros Biotechnologie, Precision Therapeutics, UMD, Zars Pharma

UMD to close $8M for menstrual pain and osteoporosis — Cincinnati’s UMD, a developer of vaginal drug-delivery technologies, expects to close up to $8 million in a fifth funding round, VentureWire reports (subscription required). The company has backing from an undisclosed new investor, and expects former investors Charter Life Sciences and Asset Management to join the round.

UMD is developing a new version of an off-patent anti-inflammatory drug called ketorolac that can be administered on the end of a tampon for menstrual pain, and hopes to begin mid-stage human tests this year. It plans a similar delivery formulation for the active ingredient in Merck’s osteoporosis drug Fosamax, which loses patent protection this year. The company doesn’t have a Web site.

Precision Therapeutics aims to raise $81M in IPO for personalized cancer tests — Pittsburgh’s Precision Therapeutics, a developer of diagnostic tests that aim to predict patient response to chemotherapy, filed to raise $80.5 million in an initial offering. The company’s tests use biopsied tumor cells to assess the likelihood that a given drug or drug combination will be effective.

This is a fairly low-tech sort of diagnostic — as its filing makes clear, Precision basically just removes tumor cells and then starts hitting them with various drugs in the laboratory to see whether they live or die. The company has only been marketing its current test, which it calls ChemoFx, for the last year or so; although it has had ChemoFx on the market since 1997, it ceased sales activity in 2003 and didn’t resume it until last year. Revenues have been predictably anemic, as until recently Precision didn’t have an active sales force, and last year the company managed the feat of posting a gross loss, in which its cost of sales in terms of lab expenses exceeded incoming revenue.

There’s other bad news, too. Precision notes that two respected organizations — the technology-evaluation center of the Blue Cross and Blue Shield Association and a working group of the American Society of Clinical Oncology — concluded in 2004 that “chemosensitivity/chemoresistance assays” such as ChemoFx lacked supporting data that would justify their routine use.

The company also parses several complex reimbursement decisions in a fairly convincing illustration of the risk that relatively few insurers may actually want to pay for its test. It further notes that clinical data supporting use of its test is “limited,” and although it cites the results of three studies carried out between 2002 and 2006, none of them look particularly convincing. In one of the few bright spots in its filing, Precision says it is currently conducting five additional studies, some of which appear to be fairly rigorous “prospective” studies of the diagnostic.

Zars Pharma sets IPO price target — Zars Pharma, a Salt Lake City specialty pharmaceutical company that reformulates pain drugs for delivery via skin patches, set a price range for its IPO and now seeks to raise as much as $92 million in the offering. (See our previous coverage here; the company has apparently changed its name to “Zars Pharma” from “Zars.”) The company plans to offer up to 5.75 million shares at a price of $14 to $16 apiece.

Clinical Data acquires Epidauros Biotechnologie for $11.8M — Clinical Data, a publicly traded diagnostics and personalized-medicine company in Newton, Mass., agreed to pay $11.84 million (€8.75 million) to acquire Epidauros Biotechnologie of Germany. Founded in 1997, Epidauros studies genetic factors that may determine how individuals respond to drugs.

UPDATE (11am PT on Sunday, 8/26/07): Added Clinical Data/Epidauros item.

Featured companies: Alpex Pharma, Applied Computational Technologies, Separation Design Group, ThermalTherapeutics Systems

Switzerland’s Alpex Pharma raises $9M for plop, plop, fizz, fizz drugs– Alpex Pharma, a Mezzovico, Switzerland drug-formulation company, raised $9 million (CHF 10.9 million) in a second round of funding. Investors included BB Biotech Ventures and Signet Healthcare Partners.

The company essentially reformulates pharmaceuticals for other companies with technologies that make pills melt quickly, allowing them to be taken without water, or to “effervesce” — that is, dissolve — in liquid, much like Alka-Seltzer. Founded in 1988 under the name Aesculapius Pharma, Alpex was acquired by Elan Pharmaceuticals in 1992. Private-equity funds controlled by Sanders Morris Harris then acquired a majority interest in 2004 and changed the company’s name to Alpex.

Pittsburgh Life Sciences Greenhouse invests $450K in three firms — The Pittsburgh Life Sciences Greenhouse, which we last covered in the sixth item in this daily briefing, has struck again, funding three local companies to the tune of $450,000. The public-private partnership invested $200,000 in ThermalTherapeutics Systems, which is working on a more efficient pump for chemotherapy drugs. Applied Computational Technologies received a $150,000 investment for development of a radiation-dose calculation engine. Medical-oxygen concentrator Separation Design Group received $100,000.

Split Rock Partners names Jagi Gill entrepreneur-in-residence — Split Rock Partners, a VC firm with offices in Minneapolis and Menlo Park, Calif., made medical-device executive Jagi Gill an entrepreneur-in-residence. Gill, currently chairman of PhysioStream and the former CEO of Sage Medical Technologies, will aim to seed new medical-device companies for the firm.

(UPDATED: See below.)
Is there a better way to combine drugs in cancer chemotherapy? Celator Pharmaceuticals, a Princeton, N.J., venture drug maker that just raised $10 million, aims to find out.

Like Horizon Therapeutics, which we wrote about here, Celator is convinced that combining two existing drugs in a single formulation at the right proportions can yield better results than current treatments. Although many chemo drugs are already used in combination, the drugs that can be used this way are limited by their side effects. For instance, two chemo drugs that cause severe nausea can’t be used together, because each would have to be given at a less-than-optimal dose in order not to completely debilitate the patient.

In addition, Celator is convinced that various chemo drugs — and here we’re talking about traditional “cytotoxic” chemotherapy that typically kills off all cells that divide quickly, including those that line hair follicles or the digestive tract — tend to work either in concert or at odds depending on the balance in which they’re delivered. So by identifying the drugs that work best together when mixed at an optimum ratio, the company hopes to enhance chemo’s tumor-killing power while minimizing side effects.

Sounds great. Does it work? So far, it’s hard to say. Celator’s lead candidate, CPX-1, is a combination of irinotecan and floxuridine at the cleverly derived molar ratio of, um, one to one. That drug is now in mid-stage human trials. The company’s second candidate, a combination of cytarabine and daunorubicin known as CPX-351, is entering a phase I trial against acute myeloid leukemia.

There are a few cautionary notes. In an earlier “phase I” test of CPX-1 in 26 patients, 15 saw their tumors stabilize for at least two months and two experienced tumor shrinkage (see the PDF “poster” on the study here). Of course, like most early-stage trials, that test wasn’t randomized, controlled or blinded — every patient got the drug — which pretty strongly limits the conclusions you can reasonably draw from it. It certainly doesn’t support the company’s claim in its press release that “over 70 percent of cancer patients in the trial showed a clinical benefit.” For the record, 17/26 is 65 percent, not 70 percent; you can only get to the 70 percent figure by ignoring the data for three patients whose cancer wasn’t “evaluated,” including one who lived less than two weeks after getting the drug. It’s also kind of dicey to claim “clinical benefit” for a drug when you can’t answer the question, “Compared to what?” — which this trial most certainly wasn’t designed to address.

Still, it’s early days for this sort of combination-drug work, and Celator’s investors certainly seem game to tag along. Investors in this follow-on to the company’s $40 million second funding in 2005 included Domain Associates, Quaker BioVentures, TL Ventures, Ventures West Management, GrowthWorks Capital, the Business Development Bank of Canada, and Hearthstone Investment.

The New Jersey Star-Ledger has more here.

UPDATED: Added some additional thoughts on Celator’s claim of “clinical benefit” in its phase I trial.

UPDATE REDUX: Celator’s PR rep lodged a factual objection to the original lead sentence, so I’ve tweaked it.

ProCertus BioPharm, a Madison, Wis., company developing drugs to minimize the side effects of radiation and chemotherapy, raised $2.3 million in a first round of financing. The company will use the money to begin human tests of products such as DermX, which is supposed to prevent radiation-therapy induced dermatitis.

The round was led by Venture Investors, a significant Midwest-based healthcare and IT venture firm. Existing investors including the Novartis Venture Fund also joined the round.

These are serious players who presumably don’t throw their money around lightly, so it’s probably not wise to draw too many conclusions from ProCertus’ kitschy Web site, which is not only outdated (it refers to clinical trials planned for 2006 that apparently haven’t yet started) but inaccurate (it states that there are no competing products for treatment or prevention of cancer-treatment induced hair loss, dermatitis, or mucositis, a claim with which the folks at Amgen would presumably take issue).

The company’s announcement is here.

Is the bell tolling for EPO? – The news keeps going from bad to worse for the wonder drugs of biotech — the anemia treatments known as ESAs or EPO, shorthand for “erythropoiesis stimulating agents” and “erythropoietin,” respectively. Earlier today, an FDA advisory panel recommended new warnings for the drugs, which stimulate the production of oxygen-carrying red blood cells, as well as fresh clinical studies on their safety. Recent studies in kidney-dialysis patients linked higher doses of ESAs to heart problems and strokes, while studies in cancer patients treated for chemotherapy-related anemia have suggested that the treatments don’t improve patient survival, and may even cut lives short — possibly by encouraging tumor growth.

New restrictions, which the panel didn’t spell out, could put a serious crimp in ESA sales, which currently amount to billions of dollars for Amgen and Johnson & Johnson. The two companies have also been taking a public-relations battering in terms of how they promote the drugs. Yesterday, the NYT ran a front-page piece that detailed how rebates offered by Amgen and J&J encourage doctors to overuse the drugs, and today the WSJ followed with a look at whistleblower allegations that J&J boosted EPO sales by pushing higher-than-approved doses.

It’s worth remembering that while the storm is currently walloping industry giants like Amgen and J&J, plenty of smaller biotechs that have staked their hopes on getting into the anemia-treatment game could eventually be affected as well. These companies include Affymax, FibroGen and Neose. Only Affymax is public; another potential ESA competitor, GlycoFi, was acquired by Merck last year.

First embryonic stem-cell trial edges forward – By early next year, Geron plans to be injecting recent spinal-injury patients with nerve cells grown from embryonic stem cells, in hopes of regenerating damaged nerve pathways. This trial was supposed to be underway already, but last year the FDA requested more animal data for safety purposes. Geron CEO Thomas Okarma says the treatment will have been tested in 2,000 animals before it ever reaches humans. The FT’s Clive Cookson has the story.

Aggressive treatment leads to worse “quality of death” in cancer patients – File this one under things you already knew but didn’t want to think about. A study of 243 advanced cancer patients revealed that a greater number of aggressive treatments — including the use of ventilators and non-palliative chemotherapy — in the last week of life was associated with greater physical and psychological distress and a lower chance of dying in a preferred location (often home). Money quotes:

[Said study lead author Gabriel Silverman:] “These results suggest that when patients are actively dying, the use of aggressive treatments should be considered with caution and only pursued with the full understanding of patients or their surrogate decision makers.

[...]

“As a doctor, if I had a patient or family who wanted aggressive, life-sustaining care toward the end of their life, I would view it as a red flag warning of patient or caregiver distress,” Dr. [Robert] Arnold [of the University of Pittsburgh] concluded. “Often patients and their families are suffering, sad, or distressed at the end of life, and when dying occurs in medical settings they may hope that aggressive treatment will help the suffering, but often it doesn’t.”

Tau gets a little respect – For the past decade or so, Alzheimer’s researchers have concentrated their attention on beta amyloid, the protein that clumps around neurons in “tangles” visible in the autopsied brains of many — though not all — Alzheimer’s patients. Now comes evidence that a dark-horse protein called tau may also bear some responsibility for the disease. Researchers reported last week in Science that they reversed memory loss in mice by tinkering with their genes to produce lower levels of the tau protein. It’s heartening to see competing theories getting some attention in the Alzheimer’s community, which has had an unfortunate tendency to shun researchers who strayed from the majority opinion, but don’t expect beta-amyloid supporters to give much ground until they have to. That might be soon, as a new batch of drugs designed to block formation of beta-amyloid tangles should begin reporting data from human trials later this year.

New genetic heart-disease link – Another whole-genome association study has identified a new genetic variation that appears to increase heart-attack risk by 60 percent in European populations. The catch is that the variation doesn’t appear to be associated with any known gene, and instead exists in the long stretches of non-coding, or “junk,” DNA, meaning that no one has any idea why it should have any effect on heart-attack rates. The NYT has more.

Stem-cell researchers make like Willie Sutton – Near the end of this otherwise unremarkable account of a talk by James Thomson, the Wisconsin researcher who first isolated and grew human embryonic stem cells, comes this interesting nugget: Thomson will open a “satellite laboratory” on the UC Santa Barbara campus for stem-cell collaborations with UCSB researchers. Coincidentally enough, having a presence in the state might also qualify Thomson for funding by California’s $3 billion stem-cell program. Willie Sutton, you’ll recall, is the outlaw who once proclaimed that he robbed banks “because that’s where the money is.” Some sentiments, it seems, are universal.

Hypocrisy in the generic-biologics fight? – The prospect of legislation that clears a path for “generic” versions of expensive biotech drugs appears to have dimmed significantly. But biotech consultant and blogger David Williams — no fan himself of the push for “biogenerics” — notes that biotech companies and their lobbyists may be shooting themselves in the foot when they argue that biogenerics could never be “identical” to branded products now on the market. It’s worth reading his entire post — it’s not long — but the gist is that changing the manufacturing process for name-brand biotech drugs, which happens all the time, opens up the same “equivalence” issues that BIO and its allies find insurmountable where biogenerics are concerned. The main difference is that name-brand manufacturers can handle the issue with short, inexpensive “bioequivalence” trials — but they insist that biogenerics must undergo expensive, full-blown clinical testing to assure their efficacy and safety. If the biogenerics issue heats up again, don’t be surprised to see this argument make a comeback.

Surgical robots in space, stem cells in rodent eyes – These are just two interesting stories from the San Jose Mercury News I haven’t yet had a chance to mention. Last Sunday, the Merc ran this piece on efforts to automate surgery, with the ultimate goal of building robots that could operate on astronauts in space or soldiers on the battlefield. Far off and far out stuff. Similarly, this piece outlined the possibility of growing new blood vessels using an early and highly regenerative stem cell called a hemangioblast. Ultimately, these fast-growing cells could one day regrow blood vessels in the heart, eyes or limbs that were damaged by injury or disease.