VentureBeat

(UPDATED at 6:40pm PT: See below.)

Featured companies: Nereus Phramaceuticals, KFx Medical, NeuroMed Pharmaceuticals, Adnexus Therapeutics, Masimo, Biofisica, Aegera Therapeutics, LymphoSign, InfuScience, Palmetto Infusion Services

Nereus Pharma raises $45M for ocean-derived cancer drugs — San Diego’s Nereus Pharmaceuticals, a biotech that searches for cancer drugs in marine microbes, raised $45 million in a follow-on to its fourth funding round.

The company features an all-star lineup of investors, which includes BankInvest, Roche Venture Fund, Astellas Venture Management, Boston Life Science Venture Corporation, Taiwan Global Biofund, Eminent Venture Capital, HBM BioVentures, Alta Partners, Forward Ventures, Advent International, GIMV, InterWest Partners and Pacific Venture Group.

From the press release:

The proceeds from the financing will be drawn down in two tranches and used to complete Phase I and begin Phase II clinical trials for Nereus’ two drug candidates. The first compound, NPI-2358, is being evaluated for the treatment of solid tumors and lymphomas in Phase I clinical trials. It is a potent, selective tumor vascular disrupting agent (VDA), a class of compounds that represents a novel approach to disrupting the intrinsic tumor blood flow, which leads to tumor cell death. NPI-2358 has favorable preclinical characteristics, such as a longer duration of action on tumor blood flow, activity against multi-drug resistant tumor cell lines and a favorable preclinical toxicology profile. The compound is one of 200 analogues that were produced after finding activity and novel chemistry from a marine fungal extract.

Nereus’ proteasome inhibitor NPI-0052 is in Phase I trials for solid tumors, lymphomas and multiple myeloma. Preclinical studies indicate that this next generation compound may be superior to Velcade(R), with broader target inhibition, faster onset of action, higher potency, oral and intravenous availability, and activity against myeloma cells resistant to Velcade(R) (bortezomib, Millennium), Thalomid(R) (thalidomide, Celgene Corporation), Revlimid(R) (lenalidomide, Celgene Corporation) and steroid therapy. NPI-0052 was derived from a marine-obligate gram-positive actinomycete (Salinispora tropica).

Rotator-cuff specialist KFx Medical raises $10M — San Diego’s KFx Medical, a Carlsbad, Calif., developer of minimally invasive repair systems for rotator-cuff injuries, raised $10 million in a second funding round. Investors included Alloy Ventures, Charter Life Sciences, Arboretum Ventures, Montreux Equity Partners, and MB Venture Partners.

It’s pretty difficult for a non-surgeon to figure out exactly how KFx’s system works better than current medical practice, but if you’re interested in a look, check it out here.

NeuroMed Pharma drops Merck work on pain drug, raises $36M — Vancouver-based NeuroMed Pharmaceuticals, a biotech focused on new pain meds, discontinued Merck-funded work on an experimental pain drug called MK-6721. The Merck collaboration, valued at as much as $475 million, will continue.

Separately, NeuroMed has raised $36 million toward a fifth funding round, VentureWire reports (subscription required). That round isn’t yet complete, and the investors haven’t been disclosed. The funding is designed to pay for completing late-stage human trials of a separate pain drug the company recently licensed from a J&J subsidiary.

Adnexus raises $15.5M against cancer — Adnexus Therapeutics, a Waltham, Mass., biotech developing a new class of drugs against cancer and other diseases, raised $15.5 million in a third funding round. Investors included HBM BioVentures (Cayman), Atlas Venture, Flagship Ventures, Polaris Venture Partners and Venrock. The company intends to use the proceeds to further clinical development of its lead candidate, Angiocept, which is currently in early-stage trials in cancer.

Masimo IPO raises $233 million, jumps 23% on first day — Irvine, Calif.-based Masimo, a major developer of non-invasive patient monitors, priced its IPO in the middle of its predicted range of $16 to $18 per share, raising as much as $232.9 million — just shy of the quarter-million-dollar mark we discussed here. Since the offering involved a hefty chunk of shares sold by existing shareholders, however, the company can only pocket up to $55.9 million of the proceeds. Investors received the offering warmly, pushing the stock up to $20.90 yesterday, a rise of 23 percent.

Biofisica raises $2M in venture debt for wound healing — Atlanta’s Biofisica, a medical-device maker focused on wound healing, raised $2 million in debt financing from Leader Ventures. The company makes an electrical-stimulation device designed to speed the healing of wounds, and currently sells it in the United Kingdom.

Aegera acquires LymphoSign, uniting two Canadian oncology biotechs — Aegera Therapeutics, a Montreal biotech focused on cancer, acquired Toronto’s LymphoSign, another cancer-specialized biotech, for undisclosed terms. Several shareholders also made additional investments in Aegera’s previously announced third funding round.

InfuScience acquires Palmetto Infusion Services — InfuScience, a Chicago provider of drug-infusion therapy, acquired Palmetto Infusion Services of Beaufort, S.C., for an undisclosed sum.

UPDATE (6:40pm PT): Added KFx Medical item.

San Diego’s NovaCardia, a developer of drugs for cardiovascular disease, agreed to sell itself to Merck for $350 million.

The specialty pharmaceutical company has in-licensed two drugs from other drug makers, one to treat kidney problems in heart failure patients and another for atrial fibrillation. The heart-failure drug, KW-3902, should enter a late-stage trial this year; the atrial-fibrillation drug, meanwhile, is slated to enter mid-stage trials this year.

Actually, I take that back — KW-3902 has already completed one “pilot” late-stage trial, which is intended to establish the dose for three later trials that the company apparently hopes to present together in order to win FDA approval. It’s kind of unusual to still be establishing the proper dose this late in the process, and the FDA often looks askance at multiple trials if the company intends to try to make some sort of combined analysis. But I guess Merck is satisfied if they’re willing to pay top dollar for the company.

NovaCardia had filed for an $86.3 million IPO in March, after rejecting acquisition offers the previous year.

House-Senate confrontation set over biogenerics – Late last month, a key group of senators reached agreement on legislative provisions that would authorize copycat versions of biotech drugs, which are typically complex proteins manufactured by genetically engineered cells (see details here and here). These provisions would finally put biotech drugs — which don’t face cut-rate competition once their key patents expire — on a par with traditional pharmaceuticals, and have been a long time in coming. They’re not perfect, but they’re about as good a compromise as we’re likely to see any time soon..

The catch is that biogenerics supporters want to attach this langauge to a reauthorization of the FDA’s user-fees act, the awkwardly named PDUFA, which has to pass by September to keep the FDA operating smoothly. The Senate’s version passed in May, whereas the House just approved its version yesterday — but didn’t include a biogenerics pathway. The senators want to add it to their version of the bill, which has to be reconciled with the House version in a conference committee. But key House members, including Energy and Commerce Chairman John Dingell, a Michigan Democrat, appear likely to object, since they haven’t had a chance to weigh in on the provision.

The upshot: Turf wars between the houses of Congress may cost us our best shot at biogenerics legislation in some time. Tying the measure to PDUFA would be one of the best ways to sidestep legislative roadblocks that opponents and their biotech/pharma backers are likely to throw up — but the window is closing rapidly. The WSJ has more here.

Digital medical records are good for your health — or are they? One of the strongest arguements for digitizing medical records is that they’ll help prevent medical errors and improve medical care. A recent review of other studies in the journal Health Services Research gave digitized records a strong vote of confidence when it found that hospitals that switched to electronic drug-ordering systems saw a 66 percent drop in medication errors. (Such mistakes apparently kill 500,000 U.S. hospital patients every year.) Similarly, a report from the Pharmaceutical Care Management Association predicts that electronic prescribing could save Medicare as much as $29 billion over the next two years while preventing two million medication errors.

As with any technology, however, electronic records are no panacea. Another study of walk-in doctor visits found no improvement in treatment quality among practices that used electronic medical records versus those that still relied on paper. The study’s conclusion: Implementing digitized records is just the first step — doctors and medical groups still need to do a lot of work to get the most out of them.

On a related note, a Senate committee recently passed legislation that would offer subsidies to convince doctors to install digital health-record systems.

RNAi is hot, hot, HOT — Once again, it’s boom times for a new drug technology, and this time the spotlight is on RNA interference — a fascinating but largely unproven method for turning off individual genes by using a short stretch of double-stranded RNA to activate ancient gene-silencing machinery inside cells.

The party really got started last year, when Merck paid $1.1 billion to acquire Sirna Therapeutics, a fledgling RNAi company that had barely managed to move a single drug into an early-stage trial. Now things have heated up even further. Last Friday, AstraZeneca struck a $400 million deal with Silence Therapeutics. Then on Tuesday, Roche stepped up to forge a $1 billion deal with Alnylam, an early pioneer in the area.

What’s worth remembering is that no matter how promising a technology like RNAi seems, putting it to practical use almost always takes far longer and costs more than people expect in the early stages. Just take a look at the roll call of other drug technologies that have undergone similar cycles of hype and disappointment — gene therapy, antisense, therapeutic vaccines. All remain promising — but none of them worked the first time out of the gate. Even monoclonal antibodies took close to two decades before anyone could make a reasonable drug with them. Maybe RNAi will be different — but I wouldn’t bet my wallet on it.

Have cancer vaccines gotten a raw deal? A paper in Clinical Cancer Research (described here) argues that regulators and companies may be too quick to dismiss clinical-trial results if they focus on tumor shrinkage rather than long-term outcomes like survival. That may well be true, as tumor shrinkage is a notoriously bad measure of whether drugs work or not, although it’s also worth noting that a reconsideration still wouldn’t have helped Dendreon’s Provenge vaccine, since its survival data was so statistically equivocal. (Separately, the SEC has now opened an informal inquiry into Dendreon’s public disclosures about Provenge this year.)

DNA transplant “transforms” microbial species – J. Craig Venter’s group at his eponymous institute takes the honors, described here in the WaPo. Next up: Transferring an entirely synthetic genome into a DNA-less microbe to create “artificial life,” something Venter says may happen within months. Similarly, here’s the NYT on the new science of “synthetic biology.” Brace yourselves.

Does “pay for performance” improve medical care? A few weeks ago, the WSJ said no, citing a Medicare experiment. Today, the NYT says yes, citing… a Medicare experiment! I’ll have more to say once my head stops hurting.

Pre-implantation genetic diagnosis may harm fertility – Or so say the authors of a Dutch study described by the WSJ here. Several researchers seem to think the results need to be verified elsewhere before abandoning the procedure, in which a single cell is extracted from an IVF embryo for genetic analysis.

Stem cells tailor their own environments — At least according to Canadian researchers, who explored the specifics of how embryonic stem cells communicate with the cells around them. The Globe and Mail has the story.

Simple enzyme short-circuits bacterial drug resistance – Basically, it prevents bacteria from swapping the genes that confer resistance to antibiotics.

High-throughput output –

• Vermont sets up a Web site comparing pharmacy drug prices (Kaiser)
• Researchers discover molecule that may promote food allergies (BBC)
• Breast-cancer risk genes may not influence survival (WSJ)
• Congressional Democrats want to know who muzzled the former surgeon general (Bloomberg)
• Scientists identify gene linked to autism (BBC)
• Robotics help stroke patients regain function (NYT)

(NOTE: This item originally incorrectly stated that J. Craig Venter’s company, Synthetic Genomics, was involved in the research that transplanted one microbe’s genome into another. In fact, it was Venter’s own research institute, the J. Craig Venter Institute.)

I’m at work on a longer post that hasn’t yet come together, so I thought I’d pull an old dodge favored by daily newspaper columnists and respond to some reader comments instead. Fortunately for me, both comments left here in the past day or so have been thought-provoking — maybe there’s hope for the Internet after all.

With respect to the tussle over patents and drug pricing in Thailand, Gal Josefsberg wrote:

I’m not sure how they expect to get cheap HIV drugs if the destroy the company’s profits. I know we all think these sort of drugs should be cheap, but there’s an enormous cost to developing and testing them. Without some kind of profit motive, the R&D spent on these treatments will go down. I’m not saying the pharma companies should gouge HIV patients, but just saying “thanks for developing this drug, we’ll take it from here” is not the right answer.

Where AIDS drugs in the developing world are concerned, the arguments tend to be a little more complicated than I may have suggested. Some pharma and biotech companies — I’m most familiar with Gilead Sciences, although I believe others do this as well — explicitly acknowledge that it’s wrong to profit from the world’s poorest nations and set what they call “no-profit” prices for HIV drugs in almost 100 countries. Of course, they still plan to make out handsomely in the U.S., Europe and other industrialized parts of the world.

Things, however, get quite a bit murkier in “middle income” nations like Thailand, where the population as a whole is unquestionably getting richer, but where many of the people who need the drugs most are also still quite poor. Critics argue that it’s the responsibility of the Thai government to help its citizens afford drugs, and while they have a point, I’m not convinced the drug companies are wholly blameless. Many of them have only grudgingly begun efforts to cut poorer nations some slack on the price of life-saving drugs, following years of protest by AIDS activists and international organizations. Given that many activists still think companies like Abbott are trying to profiteer in developing-but-not-exactly-wealthy nations like Thailand, it’s no wonder that distrust of the pharmas still runs high in many quarters.

By the way, Brazil has apparently issued a similar threat to Merck over its HIV drug efavirenz (via Pharmalot).

In response to an item on the tactics drug reps use to push their product on doctors, RJ notes:

the first paper seems to be describing a phenomenon known as “sales”– truly a beauty to behold when it’s done well. No matter whether you’re selling drugs or enterprise software. That’s why the great sales people are paid so much. They’re artists.

That paper was written so vividly that I couldn’t help but wonder if Ahari, the former Lilly rep, doesn’t kind of miss his old job for exactly those reasons. There’s definitely something awe-inspiring about watching a professional salesperson at work, although I’d feel better about admiring it here if the sales job wasn’t specifically designed to override a physician’s best medical judgment — which is, after all, what the patient needs most and what insurers are supposed to be paying for.