Euthymics Bioscience, Inc., a clinical-stage company developing next-generation antidepressants, today announced the completion of a Series A financing — led by Novartis Venture Funds and Venture Investors – for a total investment commitment of $24 million in milestone-conditioned tranches. Hambrecht & Quist Capital Management, LLC, GBS Venture Partners and the State of Wisconsin Investment Board also participated in the financing. The initial Series A proceeds were used to complete the acquisition of DOV Pharmaceutical, Inc. and allow for the continued development of DOV’s unique antidepressant, EB-1010 (formerly known as DOV 21,947), for patients who do not respond adequately to selective serotonin reuptake inhibitors, or SSRIs. The merged company will operate as a privately held corporation with headquarters in Cambridge, Massachusetts.

“The antidepressant prescription market is among the largest, with an excess of 200 million prescriptions dispensed annually in the U.S. and a value exceeding $20 billion worldwide”

“This impressive commitment speaks to the potential of our clinical-stage entry into the antidepressant market,” said Anthony A. McKinney, President, CEO and co-founder of Euthymics. “We are addressing a significant unmet medical need, we have convincing Phase II proof-of-concept efficacy in major depression and we anticipate the start of a Phase II/III trial in the first half of 2011.”

Euthymics’ lead product, EB-1010, is intended for the estimated two-thirds of major depression patients who do not respond adequately to SSRIs. This segment is the single largest group of patients with depression and represents a major unmet medical need. EB-1010 is a novel unbalanced triple reuptake inhibitor which modulates serotonin, norepinephrine and dopamine. By “tuning” the affinity for each of these neurotransmitters in one molecule, EB-1010 is designed to improve efficacy and reduce side effects of current antidepressants, including weight gain, sexual dysfunction and cognitive impairment without the need for multiple prescriptions or complex titrations. The EB-1010 ratio of serotonin, norepinephrine and dopamine modulation is very similar to the triple combination given as multiple medications that was shown to improve outcomes in STAR*D, the large federally funded trial in major depression. EB-1010 has demonstrated proof-of-concept efficacy and attractive tolerability in patients with major depression.

“The antidepressant prescription market is among the largest, with an excess of 200 million prescriptions dispensed annually in the U.S. and a value exceeding $20 billion worldwide,” said Campbell Murray, M.D., Managing Director of Novartis Venture Funds, who will serve as Euthymics’ Chairman. “Euthymics enters this field with a ready-made market of underserved patients, a clinical-stage drug and an executive team with an impressive track record. In short, we have all the ingredients for success for our company and for our patients.”

Euthymics is led by an experienced management team. President and CEO Anthony McKinney was one of the original executives at Orexigen, where, as Chief Operating Officer, he helped take the company public and move its lead products into the clinic. He was also a member of the founding management team at Novazyme, and was Senior Vice President and General Manager at Genzyme after it acquired Novazyme for $137 million. Euthymics was co-founded by Franklin P. Bymaster, who will serve as Chief Scientific Officer. Bymaster spent over 33 years at Lilly and was involved with many of its successful CNS drugs including Prozac, Zyprexa, Strattera and Cymbalta.

Joining the Euthymics Board along with Dr. Murray are Paul Weiss, Ph.D., of Venture Investors, Frank Gentile, Ph.D., of Hambrecht & Quist Capital Management, LLC and Andrew Baker, Ph.D., of GBS Venture Partners.

When clinical trials begin next year, Maurizio Fava, M.D., Professor of Psychiatry at Harvard Medical School, Executive Vice Chair of the Department of Psychiatry at Massachusetts General Hospital and one of the leading depression experts worldwide, will serve as principal investigator.

In addition to EB-1010 for depression, the DOV acquisition gives Euthymics a pipeline of monoamine reuptake inhibitors for other CNS disorders including ADHD, obesity, anxiety, obsessive compulsive disorder and drug addiction.

First Patients With Stage 3 and 4 Chronic Kidney Disease Dosed at Two Sites

Akebia Therapeutics, Inc., a pharmaceutical discovery and development company focused on anemia and vascular disorders, today announced that it has initiated dosing in patients for a phase 2a single dose clinical trial of AKB-6548, an orally bioavailable hypoxia-inducible factor-prolyl hydroxylase (HIF-PH) in development for anemia. Akebia recently completed a phase 1b study of AKB-6548 which demonstrated a dose-dependent increase in erythropoietin (EPO), reticulocytes (immature red blood cells) and hemoglobin with no significant adverse events.

“We recently successfully completed phase 1 studies, and are pleased to now begin testing AKB-6548 in patients with late-stage kidney disease seeking treatment for anemia,” said Joseph Gardner, Ph.D., president and chief executive officer of Akebia. “Patients with chronic kidney disease often suffer from anemia, and the current treatment approach involves injectable products to increase a patient’s level of EPO. AKB-6548 is an orally bioavailable product designed to naturally increase EPO, and we believe it will offer many advantages over current approaches including safety, dosing convenience and cost-effectiveness.”

The phase 2a study is designed to evaluate the safety, tolerability and pharmacokinetics of a single dose of AKB-6548 in stage 3 and 4 chronic kidney disease patients. In addition, the efficacy of AKB-6548 will be ascertained by measuring EPO and other biomarker responses including VEGF, hepcidin, transferrin and ferritin. The trial will involve up to 28 patients and will be conducted at two sites in the United States. The study is expected to be completed by January 2011.

About HIF-PH

Hypoxia-inducible factors (HIFs) are transcription factors that regulate the body’s response to decreases in oxygen, or hypoxia, in the cellular environment. HIF-PHs are the hypoxia-inducible factor prolyl hydroxylase enzymes that normally regulate the levels of HIF in bodily tissues. By inhibiting HIF-PH enzymes, HIFs can be stabilized or up-regulated, allowing the body to better respond to reduced oxygen, injury and infection. The ability to stabilize HIFs may lead to treatments for many conditions including anemia, fractures, wounds and other conditions where the HIF mechanism is not functioning optimally.

About AKB-6548

AKB-6548 is an orally bioavailable HIF-PH inhibitor designed to increase natural production of EPO, a glycoprotein hormone that controls red blood cell production. Inadequate EPO production by the kidney is a common cause of anemia. Akebia will initially target patients with chronic renal disease and pre-dialysis patients, two patient populations that are currently undertreated for anemia. AKB-6548 potentially promises to be a safe, cost effective, orally dosed drug that delivers the efficacy of injectable EPO stimulating agents.

The market for chronic anemia drugs, which generates over $10 billion in worldwide sales, is dominated by injectable forms of recombinant EPO. There are currently no orally dosed small molecule drugs for the treatment of chronic anemia.

About Akebia Therapeutics

Akebia Therapeutics is a discovery and development company focused on anemia and vascular disorders. Akebia’s lead program, AKB-6548, an orally bioavailable HIF-prolyl hydroxylase (HIF-PH) inhibitor for patients with anemia, is in phase 2 clinical trials. AKB-6548 potentially promises to be a safer, less expensive, orally dosed pharmaceutical to stimulate endogenous EPO production. Additionally, Akebia has a novel HPTP beta inhibitor / Angiopoietin 2 modulator, AKB-9778, for the treatment of vascular leak syndrome and critical limb ischemia which is scheduled to commence phase 1 clinical trials in early 2011.

Susan Healy is named Chief Financial Officer and experienced oil industry executive David Jacober joins the Board of Directors

Virent Energy Systems, Inc. announced today that Susan Healy has been named Chief Financial Officer and Shell executive, David Jacober, has been elected to the company’s Board of Directors.

Ms. Healy was most recently Senior Vice President and CFO at Lands’ End, the international apparel retailer. She also served as CFO of Goldman Sachs’s power asset business, helping to grow its asset portfolio more than six-fold over three years. With over 18 years of finance experience, including positions in corporate treasury and investment banking at Goldman Sachs and Lehman Brothers, Ms. Healy has raised over $8 billion and executed $25 billion of M&A transactions across a variety of industries. She earned a BS in Business Administration from California State Polytechnic University and a JD from Harvard University.

Ms. Healy will have responsibility for the company’s financial, accounting, and information technology operations. She will report to Lee Edwards, President and CEO.

Virent’s new Board Member, David Jacober, is the Business Opportunity Manager – Americas Team Lead at Shell Downstream, Inc., where he leads the development and implementation of large, strategic capital projects for process safety, growth, and energy conservation across Shell’s global Downstream Manufacturing assets. Mr. Jacober has over 30 years of refining experience with Shell Oil Company and holds a BS in Chemical Engineering from the University of Illinois.

“Virent is fortunate to add two knowledgeable and experienced leaders in their respective fields. Susan Healy brings a strong track record in financial leadership including capital-raising, treasury and deal making, to help build our financial foundation essential for the successful commercialization of Virent’s innovative BioForming® technology platform,” said Lee Edwards, Virent’s president and CEO. “With decades of petroleum refining and distribution expertise, David Jacober adds a valuable perspective of large capital projects to Virent’s Board. His knowledge of global refining, chemicals and transportation fuels will be indispensible to the successful market introduction of Virent’s fungible renewable hydrocarbon products.”

About Virent Energy Systems

Virent’s BioForming process is a leading technology for the production of sustainable advanced biofuels, including biogasoline, diesel, and jet fuel, and many chemicals. The process has won numerous technology and innovation awards including the U.S. Environmental Protection Agency’s Presidential Green Chemistry Challenge and the World Economic Forum’s Technology Pioneer awards. Virent has 80 employees and a state of the art catalytic biorefining development facility located in Madison, Wisconsin. Virent counts premier, global companies Cargill, Shell, and Honda, among its investors. The BioForming technology is based on the patented Aqueous Phase Reforming process. To learn more, visit: www.virent.com.

PEHUB.com

Venture capitalists have put a lot of money over the past couple of years into companies developing treatments for eye disease. Now they’re seeing some ROI.

This week, venture backers in LensX Lasers got what looks on paper to be a very nice exit that could turn into a much better one, when Alcon announced that it has entered into a definitive agreement to acquire the company. Alcon will pay US $361.5 million in cash for LenSX, a developer of a laser used in cataract treatment, plus maximum contingent payments of US $382.5 million if it hits agreed-upon milestones.

Four-year-old LenSx, which developed what Alcon says developed is first femtosecond laser to receive U.S. Food and Drug Administration clearance for use as a part of cataract surgery, previously raised $32 million in venture funding. The Aliso Viejo, Calif.-based company’s investors include InterWest Partners, SV Life Sciences Advisers,  Venture Investors and Versant Ventures.

It’s the second eye-related acquisition in as many months. In June, Bausch & Lomb bought the assets and U.S. rights for Zirgan, a drug approved by the U.S. Food and Drug Administration last year as a topical anti-viral for the treatment of corneal ulcers, from Sirion Therapeutics, a venture-backed developer of ophthalmic products. Terms of the transaction were not disclosed. Sirion has raised $71 million since 2005 from backers including Advent International, Aisling Capital, Atlas Venture and Avalon Ventures.

The other big M&A deal in the eye space this past year came from Abbot. In September, Abbott bought Irvine, Calif.-based Visiogen for $400 million. The company develops technologies for treatment of age-related vision loss, specifically cataracts and presbyopia. Visiogen previously raised $77 million between 2001 and 2009 from venture investors including Prospect Venture Partners, Sprout Group, Technology Partners, Three Arch Partners new Leaf Venture Partners and Foundation Medical Partners.

In the past year, VCs have backed some sizeable new rounds for companies in the ophthalmic space as well. Tear Science, which develops therapeutics for dry eye disease, raised $44.5 million Series C round in May with backing from new investors Essex Woodland Health Ventures, Investor Growth Capital and General Catalyst.  Lux Biosciences, which develops medications for ophthalmic diseases, raised a $50 million round in October with backing from HBM Bioventures, Novo A/S, Prospect Venture Partners and SV Life Sciences. And Oraya Therapeutics, which develops a robotically controlled “IRay” system to treat inflammatory diseases of the eye, raised $42 million in a round that closed last July.

A quick database search for pharma and med-tech companies with the word “eye” in their business description revealed that VCs have funded at least 18 companies that meet that criteria in the past year, investing about $260 million.

Fred Robertson, chief executive officer of TomoTherapy, says a series of product innovations coupled with an uptick in the economy could result in an upbeat second half of 2010 for the company. TomoTherapy’s Hi-Art machines spiral around a patient, sending narrow beams of radiation at cancerous tumors.

TomoTherapy is hoping the sun will shine on the company during the second half of 2010.

With several new formats for its specialized cancer treatment radiation technology and the nation’s economy trying to emerge from a recession, things could align in TomoTherapy’s favor, company officials said.

And it would be none too soon, after a couple of difficult years during which competition increased and hospitals cut back on major equipment purchases.

Considered a star in Madison’s high-tech economy, TomoTherapy’s luster has paled a bit. The company trimmed employment twice, eliminating nearly 150 jobs. The company now has about 600 employees, half of them in Madison.

Its stock price, which traded as high as $27 a share shortly after its 2007 initial public offering on the Nasdaq market, has been below $5 for the last 52 weeks. Research analysts are cautious about the stock, giving it a 3.0 recommendation, comparable to a “neutral” or “hold” on the stock, with an average $4 projected share price, according to Thomson/First Call.

“If you look at the history of TomoTherapy, three to five years ago, they seemed to be way out in front of the competition in a couple of areas. Today, some of the larger competitors who control 80 percent to 90 percent of the market — Varian and Elekta — really made some progress in closing that technology gap with TomoTherapy,” said Jeffrey Johnson, senior research analyst with Robert W. Baird & Co., Milwaukee.

“It’s tough for any small competitors,” Johnson said.

But Fred Robertson, chief executive officer, is looking up. He said new versions of TomoTherapy’s Hi-Art radiation treatment machine are opening it to more markets, and the company has tweaked its process for servicing the machines. While revenue last year was down 20 percent from 2008 — at $164 million, down from $204.6 million — cash and equivalents ended 2009 at $76.1 million, up from $66 million in 2008. Long-term debt remains negligible, below $600,000.

Early investors, Venture Investors and the State of Wisconsin Investment Board (SWIB), still hold stock in TomoTherapy; SWIB is one of the top 10 investors, with more than 1.2 million shares, according to March 31 information filed with federal regulators.

“In a tough environment, as a business, we have made a lot of progress,” Robertson said.

When TomoTherapy’s technology, discovered at UW-Madison, hit the market, it was unique. Instead of delivering radiation using a fixed machine and one beam pointing in a single direction, TomoTherapy’s Hi-Art system spirals around the patient, shooting a stream of potent, narrow beams at tumors.

It has been effective, the company says, in treating a wide range of cancers, from individual tumors to full-body radiation before a bone marrow transplant. Setting up a computerized dosage plan for a complicated case can take time, though, and not all cases are as complex.

Competing machines work faster, analyst Johnson said. “And in today’s health care reform environment … ability to see more patients in a day is a key clinical advantage for these hospitals,” he said.

So TomoTherapy has adapted its technology, all in the past year and a half, to make it more flexible.

TomoDirect

TomoDirect gives patients a fixed, single dose of radiation at a time, from up to 12 angles. This means each appointment is shorter. Fifteen medical centers are using it.

“This is really a key product launch for us,” Robertson said. “This gives (hospitals and clinics) a very efficient means of treating more straightforward types of cancer.” During the first three months of 2010, more than 40 percent of orders received included TomoDirect.

Up to now, most of TomoTherapy’s orders have come from large cancer centers where a large enough number of patients will have complicated cases, making it worthwhile to spend $2 million to $4 million for a Hi-Art machine. TomoDirect is aimed at competing for business from clinics with only one or two radiation treatment machines, or more than 80 percent of cancer centers in the U.S., Robertson says.

TomoMobile

TomoMobile is the “only relocatable radiotherapy treatment system in the world,” Robertson said. Built in a trailer, it can be used, for example, while a clinic is being built or remodeled or while older equipment is removed from a site to be upgraded. The first unit is in use in Muskogee, Okla.

Tomo HD

Tomo HD is the company’s premium machine, with both spiral and straight-line beams, as well as technology advances. “That really gives us access to a much larger target market,” Robertson said. Shipments will begin later this year.

Compact Particle Acceleration Corp.

Compact Particle Acceleration Corp., an offshoot of TomoTherapy, continues a collaboration with the Lawrence Livermore Laboratory in California, developing a new type of proton radiation treatment machine.

Meanwhile, TomoTherapy has made improvements behind the scenes, buying a Chinese company that makes linear accelerators, which create the high-energy X-rays used for treatment. That gives TomoTherapy a second supplier of the devices in addition to Siemens and cuts downtime for the Hi-Art machines.

Also, digital oscilloscopes are being installed in the machines, letting technicians troubleshoot problems from other locations.

TomoTherapy now has 300 systems installed in more than 20 countries.

“This has been a very tough environment. We didn’t foresee the financial crises that devastated the U.S. market and we underestimated the competitive response to our technology. But we have a very bright future,” Robertson said. “We see a lot of opportunities.”

Johnson, of Robert W. Baird, said he applauds TomoTherapy’s product advances but is “cautious” about the company and its challenges.

“I think TomoTherapy has a place, especially in those centers that want to differentiate themselves from a marketing standpoint as the absolute highest quality. But the bulk of the market today is trying to find a middle ground between speed of treatment and the gold standard,” Johnson said.

He said a survey of about 60 U.S. hospitals conducted in January showed they expect to increase spending about 7 percent this year.

“With new products and hospital budgets starting to improve a bit, I think the next year or two will really be telling on what TomoTherapy’s future holds,” Johnson said.

Being first isn’t the only goal in the drug-development business.

Sometimes, an unmet patient need is so great, companies that are second or third to market stand a good chance of success. That’s what Akebia Therapeutics Inc. near Cincinnati is hoping for as it prepares to do Phase 2 clinical trials of its drug to treat chronic anemia.

Millions of Americans who have heart, kidney, inflammatory bowel or other chronic diseases, are undergoing chemotherapy to treat cancer, or are elderly suffer from chronic anemia, according to the National Anemia Action Council. For many of these patients, anemia has progressed from simple fatigue to a life-threatening condition.

AdvertisementPharmaceutical companies have developed injectable drugs, called erythropoietin-stimulating agents (ESAs), to treat chronic anemia. But the drugs that boost erythropoietin — the hormone that stimulates the bone marrow to make more red blood cells, solving anemia — also cause an unacceptably high rate of heart attacks and strokes among some patients. These drugs can cost up to $13,000 a year.

The Food and Drug Administration has required drugmakers to warn patients about these risks. The federal regulator also has called on researchers and drug developers to come up with safer drugs.

Enter, Akebia.

More than three years ago, Joseph Gardner, who was leaving Cincinnati consumer products giant Procter & Gamble (P&G) after managing the company’s drug patent portfolio, and John Rice, who leads Cincinnati’s Triathlon Medical Ventures, snagged a half-dozen potential therapies as P&G wound down its pharmaceuticals business. Gardner — now Akebia’s president and CEO — and Rice created Akebia to commercialize those therapies, one of which is an oral erythropoietin-stimulating drug known as AKB-6548.

Last week, the small molecule discovery and development company in Blue Ash, Ohio, reported positive results from a second Phase 1 clinical trial of its anemia drug. In 33 healthy volunteers, the drug increased erythropoietin and immature red blood cells known as reticulocytes. Doses of the drug were safe and well tolerated by the volunteers.

Akebia also announced last week the second closing of a $16 million financing round announced almost a year ago, boosting the round to $17 million.

By the end of the year, the company’s executives likely will decide to partner with a large pharmaceutical company to finish development of AKB-6548 or start a second fundraising round to pay for that development, said Ian Howes, the company’s chief financial officer and vice president of corporate development.

At the moment, large pharma companies are licking their chops at a banquet of partnering opportunities with biotechnology companies. “That’s probably driven by a shortage of venture capital and private equity,” Howes said. “Biotech companies are generally left with programs that are unfunded. So, they are trying to find homes for them.”

Most big drug companies are looking for later-stage drug development programs than those Akebia has, he said. But drug companies always are hunting for potentially game-changing therapies to license from biotech companies.

Now, AKB-6548 does not have a novel mechanism, Howes said. It’s also not first-in-class — a couple of companies (GlaxoSmithKline (NYSE: GSK) and FibroGen) are “between six and 12 months ahead of us in the clinic,” he said.

But the opportunities of entering a broadening — and some would say, underserved — market for a safe, effective, affordable oral treatment for chronic anemia could outweigh the benefits of being first in the market.

“If you look at the anemia space as a whole, there are only three marketed anemia drugs in the United States, and they generate about $11 billion a year — $8 billion in the U.S. And they’re all unsafe drugs,” Howes said. “So, the FDA is looking for new drugs that are safer and easier to use.”

If the new class of drugs to which AKB-6548 belongs is successful, “You’ll see a couple of things,” he said. “You’ll see the injectable erythropoietin-stimulating agents lose a lot of market share. But I think you’ll see the overall market expand.”

The market for anemia-fighting drugs likely would get bigger as patients who can’t be treated by the risky injectable drugs, such as the elderly or those on chemotherapy, begin to be treated with the new class of oral drugs. That’s attracting the interest of large drug companies, Howes said.

Price pressure also is expected. Beginning in January, “ESA injectables are going to be bundled with all the other dialysis supplements” for insurance reimbursement purposes, he said. “So, we’re going to see the prices of ESAs tumble significantly next year.”

The tumble likely would put a lid on the price of Akebia’s AKB-6548. But if more patients are treated with the new class of drugs, the increased volume “would make up for the decrease in prices,” Howes said. “The bottom line is, with an easier-to-use, safer drug, you’ll see a lot more of it being used, then it will become cheaper.”

Inviragen has been named a Colorado Companies to Watch award winner for 2010. Now in its second year, the Colorado Companies to Watch program attracted over 420 nominees for the award. The award recognizes second-stage enterprises that are headquartered in Colorado, privately held, have six to 99 employees, and generate $750,000 to $50M in sales.

Inviragen, an international vaccine research and development company, has its headquarters in Fort Collins and operations in Madison, Wisconsin and Singapore. The company develops life-saving vaccines to protect against emerging infectious diseases worldwide. The first human clinical trial of Inviragen’s vaccine designed to protect against dengue fever was initiated in May.

Founded in 2005, the company has experienced positive year-over-year employee and revenue growth. Beginning with one staff member, Inviragen has grown to 30 employees. Revenues have continued to grow as well and Inviragen recently placed second on the Mercury 100 list, an annual ranking of the region’s fastest growing private companies. “By raising both grant and investor financing for its vaccine research and development efforts, Inviragen has been able to grow its revenues and advance its vaccines from the research bench to clinical testing,” said Dr. Dan Stinchcomb, Inviragen CEO. “Being named a Colorado Company to Watch is a tribute to the dedication of our employees to the goal of developing vaccines that will improve public health worldwide.”

Colorado Companies to Watch is organized by the Colorado Office of Economic Development and International Trade in association with economic development councils throughout the state. The panel of independent judges selected companies based on such factors as employee or sales growth, entrepreneurial leadership and sustainable competitive advantage. “Our state’s strong entrepreneurial spirit is helping to move Colorado forward,” Gov. Bill Ritter said. The Colorado Companies to Watch program is a great way to show appreciation of our home-grown Colorado businesses. These second-stage companies have helped to grow our economy even during tough times.”