Inside Biotech

Supplement to:

sddt.com/biotech07

Thursday, October 18, 2007 / Vol. 122, No. 209

Local life science industry breeds ‘serial entrepreneurs’
New companies, ideas, capital investments boon to regional economy
By SYDNIE MOORE
Special to the Daily Transcript

Roundtable discussion

(Nasdaq: NGEN), Genoptix, Epimmune, Biosite (Nasdaq: BSTE), Somaxon (Nasdaq: SOMX) and many others. Laying the groundwork In this spirit, Hybritech also set the stage for an enduring phenomenon: “serial entrepreneurship,” another catalyst for San Diego’s white-hot biotech industry. According to Panetta, a serial entrepreneur launches a new business after having already started and exited a previous venture, in contrast with someone who starts a single company and operates it as a lifelong career. A self-described “serial entrepreneur,” Greene has participated in the founding or management of 11 medical technology companies. Following his tenure at Hybritech, Amylin he co-founded Pharmaceuticals (Nasdaq: AMLN) — a diabetes drug developer now valued at $6 billion and the largest independent biotech in San Diego — and ran Biovest Partners, a venture capital fund that provided seed funding for a half dozen local San Diego biotech and medical device companies, including Biosite, Amylin, Pyxis, Vical (Nasdaq: VICL) and Cytel. Like Greene, Cam Garner, also once a key player at Hybritech, is a prototypical serial entrepreneur. After leaving Hybritech, he was CEO of Dura Pharmaceuticals for 10 years, which in 2001 was sold to Elan Corp. (NYSE: ELN) in a stock deal valued at $1.8 billion. Since Dura, Garner has gone on to launch or invest in a succession of local specialty pharmaceutical firms, including Xcel SkinMedica, Pharmaceuticals, Somaxon Pharmaceuticals (Nasdaq: SOMX) and Cadence Pharmaceuticals (Nasdaq: CADX). In 2002, Garner and several partVerus ners launched Pharmaceuticals, a pediatric-oriented company with an initial focus on the treatment of asthma, allergies and related diseases and conditions. The company announced an unprecedented $98 million in financing in 2005. Newer generation continues the tradition A more recent example of a suc-

Forty years ago, no one could have guessed that San Diego would one day be a Mecca for a robust biotechnology industry. But with a troika of internationally renowned academic centers — The Salk Institute, University of California, San Diego and Scripps Research Institute — San Diego was poised for a biotech explosion. According to Joe Panetta, president of BIOCOM, the Southern California life science association, San Diego now boasts more than 500 biotech and medical technology companies — constituting the pharmaceutical, diagnostic and medical device industries — with a work force of 37,000 and an annual economic impact of $8.5 billion. In fact, San Diego is among the top three regions in the country for biotech, closing in on the San Francisco Bay Area and Boston. A biotech legacy Along with the city’s academic powerhouses, also paving the way for San Diego’s burgeoning biotech cluster was Hybritech, a medical diagnostic company founded by in 1978 by UCSD researchers Ivor Royston and Howard Birndorf. “Hybritech was the first real biotech firm in San Diego,” says Howard E. “Ted” Greene, who served as its CE0 from 1979 until 1986, when it was acquired by Eli Lilly and Co. (NYSE: ELI). Hybritech indisputably helped fuel San Diego’s blockbuster life sciences industry. “More than 100 San Diego companies have been related to Hybritech in some way,” says Panetta, and many of today’s CEOs were originally at Hybritech.” In fact, the Hybritech alumni list includes an impressive list of heavy hitters who have gone on to launch a series of successful ventures, Ligand including (Nasdaq: LGND), Idec Pharmaceuticals, Neurocrine Dura, Gensia, Biosciences (Nasdaq: NBIX), Immune Response, Viagene, GenProbe (Nasdaq: GPRO), Nanogen

cessful serial entrepreneurship is Randall E. Woods, a former Eli Lilly executive who in September sold NovaCardia Inc., a firm focused on cardiovascular disease, to pharmaceutical giant Merck (NYSE: MRK) for a total purchase price of $366.4 million. “Not bad for a little company with 11 employees,” said Panetta. In the true entrepreneurial spirit, Woods has “now moved on,” Panetta said, and just received $20 million in financing to launch spinoff Sequel Pharmaceuticals. “Both NovaCardia’s senior management team and investors joined Sequel, a testament to everyone’s confidence in Randy and his leadership,” said Brian Farmer, vice president of corporate development and operations for Sequel, and a former business development executive with NovaCardia. “With a proven track record of licensing and developing drug candidates for cardiovascular disease, we are pleased to support the Sequel management team,” said Eckard Weber, a partner at Domain Associates, which helped finance Sequel. Also recently joining the ranks of San Diego’s biotech legends is Steven J. Mento, a microbiologist who in 2005 sold his company Idun — specializing in the treatment of liver damage — to New York-based industry leader Pfizer (NYSE: PFE) for $300 million in cash. Mento went on to found Conatus Pharmaceuticals — a specialty pharmaceutical company engaged in the development of human therapeutics to treat liver disease. Driven by ideas What drives dynamos like Garner, Greene, Woods and Mento to persevere? In addition to some hefty financial incentives, they are certainly motivated by science — and forward-thinking ideas. Typically, said Greene, those who start new biotech ventures are more interested in the product than in operating a company. “I like to figure out the product and don’t want to worry about sales, manufacturing or facilities,” he said. “Guys like me don’t like living in

Photo: J. Kat Woronowicz

Eric Loumeau (left) of law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, and Chris Burnley of Phenomix Corp. were among the participants in a recent biotech roundtable hosted by The Daily Transcript. Page 6

Private investors give vote of confidence to stem cell bonds
By ROMAN JIMENEZ
Special to the Daily Transcript

See Entrepreneurs on 8

When California voters overwhelmingly passed Proposition 71 in 2004, a $3 billion bond initiative to fund the state’s emerging embryonic stem cell research program, some wondered how enthusiastic individual investors would be to buy those bonds. The answer came on Oct. 3 when State Treasurer Bill Lockyer announced the first round of bond sales, some $250 million, had concluded. According to Lockyer, individual investors accounted for 41.1 percent of the total, or $102.8 million. According to the Treasurer’s office, individual investors were only expected to account for around 13 percent of the bond commitment. “The investment by individuals far exceeded our expectations and shows how strongly Californians believe in the promise of stem cell research to cure diseases and relieve suffering,” Lockyer said in a

statement. A total of 18 institutional investors (such as mutual funds, banks or insurance companies) bought the balance of the $250 million. Bonds were sold Oct. 3 and 4. Samuel H. Wood, M.D., CEO of Stemagen, a privately held embryonic stem cell research company, was also pleased with the level of individual investor participation, calling it a “smart and progressive investment.” “The public funding of human embryonic stem cell research makes good fiscal sense. Paying to find a cure or treatment to a disease today is far less costly than trying to

manage any disease long term,” Wood added. “It’s easier on the public purse, but most importantly, it holds the promise of easing patient suffering.” Stemagen has established itself as a leader in the field of stem cell research, already creating eight lines of embryonic stem cells from embryos that were excess of reproductive need. The company has also created multiple lines of embryonic stem cells from unfertilized embryos incapable of reproduction. These “uniparental embryos” are created by artificially activating an

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Growing the biotech work force
Source: San Diego Workforce Partnership

Latest discoveries at Salk Institute fuel new scientific questions
Source: Salk Institute

Situated high above the bluffs in Torrey Pines and overlooking the Pacific Ocean, the Salk Institute was founded in 1960 as a place where some of the world’s brightest minds would come together for the common goal of scientific discovery. Its 59 faculty members, including three resident Nobel Laureates, have kept founder Dr. Jonas Salk’s vision alive by contributing seminal breakthroughs in basic biological

research in three general areas of science: Molecular Biology and Genetics; Neurosciences; and Plant Biology. Their discoveries have continued to provide clues toward better understanding the molecular origins behind some of today’s most devastating diseases including cancer, AIDS/HIV, Alzheimer’s and other neurodegenerative diseases. Some of the most recent discoveries have provided insight into the underpinnings of Alzheimer’s dis-

ease, a condition that riddles the brain with debilitating beta amyloid plaques and neurofibrillary tangles. A study by Andrew Dillin, an associate professor in the Molecular and Cell Biology Laboratory, showed how aging impedes the brain’s ability to clear away toxic protein aggregates. Dillin and his team employed the help of tiny Methuselah worms that, despite their advanced age, still have a youthful spring in their

Photo courtesy of Salk Institute

crawl. These creatures proved that slowing the aging process also reduced the formation of toxic beta amyloid aggregates. The finding opens the door for development of drugs preventing build-up of toxic protein aggregates in the brain. While aging is the greatest risk factor for Alzheimer’s disease, another study this year by Paul Sawchenko, a professor in the Neuronal Structure and Function Laboratory, suggests that low levels of stress, the kind we experience each day, can also contribute to the onset of Alzheimer’s disease. The findings showed how the brain-damaging effects of negative emotions lead to a molecular chain reaction that cause modification of the tau protein, which collapses into insoluble fibers inside neurons. This ultimately leads to cell death. Currently, drugs in Stage 2 clinical trials for the treatment of depression and other mood disorders target the same receptors involved in Sawchenko’s study. “We may have discovered another application,” Sawchenko said. “Such drugs could have a prophylactic effect or delay the progression of Alzheimer’s disease.”

The Salk Institute, overlooking the ocean in La Jolla, supports 59 faculty members and a scientific staff of more than 850 conducting biological research.

San Diego is home to the world’s third-largest biotechnology industry. With the success of this segment has come work force supply demands that pose a two-fold challenge to the region: How do we motivate and prepare our youth to fill jobs that require an educational competitive edge in the fields of math, technology, life sciences and others demanded by the industry? How do we arm teachers with real-world curriculum that brings the classroom in line with the occupational requirements of an ever-evolving industry? One solution to creating a biotech work force talent pool has been underway since the summer of 2005: the Life Sciences Summer Institute. LSSI connects upper-level high school, university and community college students, as well as high school teachers, with leading companies within San Diego’s life sciences community. “The LSSI programs are working,” said Ashley Wildrick, special initiatives program manager of the San Diego Workforce Partnership, “and we have results to prove it. High school students who lacked direction now see the life sciences as a potential career path; college students are being placed into internships that lead to part-time and full-time positions; and research performed in participant companies, as a result of the mentorship process, has yielded patents that may influence additional job creation.” Students gained exposure to career options, hands-on laboratory experience, work readiness skills and mentoring by a company or research scientist. But first, they went through Biotech “Boot Camp,” an introduction to biotechnology laboratory work held at the Southern California Biotechnology Center at Miramar College, supplemented by materials and supplies from Invitrogen Corp. (Nasdaq: IVGN). For each student, a paid internship within the life sciences industry followed. One such student, Aditi Sharma, completed the program this summer and carried out an internship at Pfizer (NYSE: PFE). The company then hired her part-time, while she completes bio-medical engineering studies at UCSD. “My internship has given me the chance to apply the knowledge learned at school and gain a deeper appreciation and hands-on understanding of cancer biology and its implications for scientific progress of the future,” Sharma said. “I have developed confidence in my skills as a scientist and researcher, developed fundamental laboratory skills and the soft skills essential in the working world, and

See Salk Institute on 8

See Work force on 7

THURSDAY, OCTOBER 18, 2007 •

Inside Biotech • THE DAILY TRANSCRIPT

3

Close-up: Stanley Crooke

Isis uses antisense technology to target more effective drugs
By MICHAEL KLAM
Special to the Daily Transcript

Drug development is risky business. In the biotech industry, 999 out of 1,000 drugs targeted for development will fail, according to Dr. Stanley Crooke, CEO of Isis Pharmaceuticals. The Carlsbad-based company’s successes, including its development of antisense technology and its progress in infectious disease diagnosis, represent a boon for the company and the entire industry. For the rest of us, these advancements could result in easier, longer and healthier lives. Here’s the general idea: Cancer and many cardiovascular, metabolic and inflammatory diseases occur due to overproduction or abnormal production of proteins. Isis developed antisense technology to target specific areas and to disrupt the body’s process in creating these undesired proteins. “Drug discovery and development is about making patients better, effecting cures and altering the course of chronic diseases,” said Crooke, who co-founded Isis (Nasdaq: ISIS) in 1989. “That’s what I’ve done with my life, and (antisense technology) is simply a totally novel approach.” After 18 years and about $2 billion spent, Crooke and his colleagues have revolutionized the industry. “The key difference is that you create a new class of drugs, designing them to bind to a class of targets that have never been targeted by drugs before: messenger RNA,” said Crooke. “And you use genetic information to make a precise ZIP code to specifically attack one, and only one, messenger RNA.” This specificity means rapid diagnosis, faster healing and less side effects. Essentially, the technology goes straight to the source of the problem, tackles it and prevents growth of the disease while promoting healing. “Drugs are just tools that we put in the body to do a particular job,” said Crooke. “As a general rule, the more specific a drug is, the better it is, the safer it is, and the more effective it is.”

Crooke’s interest in antisense technology sparked while helping to establish Bristol-Meyer’s anticancer drug discovery and development program. Prior to founding Isis, he also served as president of research and development for SmithKline Beckman Corp., where he coordinated the company’s R&D activities in instruments, diagnostics, animal health and clinical labs. With the backing of a number of venture capitalists, Crooke created Isis to pursue the dream of “creating a new platform for drug discovery that will enhance productivity and make better drugs,” he said. The platform has since supported 17 drugs in development and one drug on the market to treat a wide range of diseases. Isis, on a per-capita basis, is the most prolific innovator of any company in drug-development history, according to Crooke. The Isis team has issued 1,600 patents and has 3,500 patent applications in process. “Every year, when patent roundups are considered, we rank along with the IBMs, the Xeroxes and the like,” Crooke said. “What that reflects is the level of innovation in the company and our commitment to tackling big ideas and staying the course.” Through its wholly owned subsidiary Ibis Biosciences Inc., Isis created a second technology called the Ibis T5000 that the company believes will radically change infectious disease diagnosis, making it more efficient. “It’s estimated that if the T5000 had been up and running at time of SARS,” Crooke said, “it would have taken us two patients and two days to learn that it was a viral disease, that it was different than anything that had been seen, and that the last time something like it was seen was in China two years earlier.” The biosensor system enables rapid identification of bacterial, viral, fungal and other infectious organisms, as well as analysis of human DNA. Isis plans to eventually spin off the technology, and Ibis Biosciences is a candidate for merger or acquisition, Crooke said.

The company also announced in September that it had been awarded $4.2 million in government contracts to Ibis for biodefense applications. “We are pleased with the ongoing government support and the opportunity to continue to advance our technology and applications in the biodefense arena,” said Michael Treble, president of Ibis and vice president of Isis, in a press release. “These contracts support the Ibis business model to commercialize the Ibis T5000 in multiple business sectors, including government biodefense and infectious disease surveillance, health care-associated infection control, infectious disease research and, in the future, in vitro diagnostics.” Isis’ products and technology have made it one of the most sought-out biotech companies in its field. In July, Isis announced it would receive $26.5 million from Cambridge, Mass.-based Alnylam Pharmaceuticals under a patent licensing agreement. The company most recently received $5 million to begin phase 1 of a study with Johnson & Johnson (NYSE: JNJ) on ISIS 325568, a diabetes drug candidate. “We’re being sought out actively because we have products that are unique and technology that is profoundly revolutionary,” Crooke said. “And the evidence for that is the deals that we’ve done this year.” Isis acquired Symphony Genesis for $120 million in late September and received part of a $1.2 million National Institutes of Health (NIH) grant to use the Ibis T5000 in influenza surveillance research. “There are companies that have aligned with us that we’ve provided selective access to our patents, but our goal has been — and we’ve succeeded in this — to be in control of the platforms,” Crooke said. “We’ve created quite a number of partnerships with larger companies.” Isis has also granted technology to smaller companies to focus on specific elements, therapeutic areas or technology that would be complementary to Isis projects.

Photo: J. Kat Woronowicz

“Drug discovery and development is about making patients better, effecting cures and altering the course of chronic diseases,” said Stanley Crooke, CEO of Isis Pharmaceuticals. “This brings the greatest value to our shareholders and the greatest value to the widest range of patients,” Crooke said. The company has received positive results from its phase 2 clinical trial of its cholesterol-lowering drug candidate ISIS 301012, recently given the generic name of mipomersen sodium. Drugs that lower cholesterol — such as Pfizer ’s (NYSE: PFE) Lipitor, which reaped $13 billion in sales in 2006 — tend to be the most profitable for pharmaceutical companies. If successful, mipomersen sodium could lead Isis into profitability. The company reported a loss of $68.1 million in 2006. Still, Isis’ stock performance in recent years seems to reflect investors’ confidence in its drug pipeline and recognition of what the company has accomplished.

See Crooke on 8

Success in dynamic VC biotech environment
By LAURA SHAWVER and CHRIS BURNLEY
Phenomix Corp.

Venture-capital funding is necessary to drive biotechnology. Without this support, the development of protein-based therapies from recombinant DNA technology and repurposing monoclonal antibodies from basic research may never have been applied to the wide range of human diseases. In the hopes of high rewards, venture capital is willing to fund novel, high-risk ideas, which are also at high risk of failure. San Diego biotechnology companies have been in a mix of good and bad news. According to Ernst and Young, San Diego finished 2006 in second place for biotech venture-capital funding, ahead of the Boston-Cambridge area and behind the four sub-regions of the San Francisco Bay Area. Biotechnology also secured the lead over other sectors in venture capital raised in the first quarter of this year, but this amount was a 40 percent drop compared to last year. So how does a company attract venture capitalists and continue to build its business when times are tough? Be adaptable, maximize strengths While it may take 10 to 12 years to bring a drug to market, the venture capital funding environment in biotechnology is very dynamic. New discoveries, technologies and business models are constantly creating an evolution of ideas and excitement. A company must maintain a vision for building value, but flexibility and adaptability are key elements for success. Phenomix Corp., a San Diego biotechnology company, provides a good example. The company was founded in 2002 based on forward genetics, a technique that was the basis of three Nobel Prize Awards. At that time, venture capital was highly attracted to using genetic technologies to understand human diseases. The forward genetics platform could

be partnered with other drug discovery companies, and in turn this could fund Phenomix’ own drug discovery and development programs. Shortly after Phenomix was founded, private-equity funds shifted their focus from platform technologies to drug development. In-licensing became a popular strategy for biotechnology companies to enter into drug development. This business model became known as NRDO (no research, development only). While new companies could start up as NRDOs, Phenomix was established based on a specific technology and had to find another way to adapt to survive in this funding environment. Instead of rebuilding the company, Phenomix figured out how to apply its technology and expertise to leap into drug development. The company took an important aspect of the technology — the early use of animal models to assess how a drug works or might work — and crossed it with a medicinal chemistry approach to quickly discover better drugs for human diseases. Today, Phenomix has two lead programs for treatment of diabetes and hepatitis C virus infection, which combined affect more than 25 million people in the United States. Phenomix has secured one of the highest levels of venture-capital support in San Diego and thrived in the dynamic funding environment by analyzing the company’s strengths and adapting accordingly. The company has focused on high-value therapeutic targets with large commercial opportunities and then worked rapidly to secure intellectual property and invent improved compounds. Build relationships, communicate regularly There are many different ways to obtain venture-funding. Knowing the investing principles for each venture capital firm is an obvious step, but understanding

See VC biotech on 8

4

THURSDAY, OCTOBER 18, 2007 •

Inside Biotech • THE DAILY TRANSCRIPT

Publicly Traded Biomed & Biotech Firms Headquartered in San Diego
Ranked By Market Cap On Oct. 9, 2007
Company Name Address Phone, Fax E-mail URL Amylin Pharmaceuticals Inc. 9360 Towne Centre Drive San Diego, CA 92121 (858) 552-2200, (858) 552-2212 ir@amylin.com www.amylin.com Invitrogen Corp. 1600 Faraday Ave. Carlsbad, CA 92008 (760) 603-7200, (760) 603-6500 investor@invitrogen.com www.invitrogen.com Gen-Probe Inc. 10210 Genetic Center Drive San Diego, CA 92121 (858) 410-8000, (858) 410-8625 ir@gen-probe.com www.gen-probe.com ResMed Inc. 14040 Danielson St. Poway, CA 92064 (858) 746-2400, (858) 622-2043 investorrelations@resmed.com www.resmed.com Illumina Inc. 9885 Towne Centre Drive San Diego, CA 92121 (858) 202-4500, (858) 587-4297 investor@illumina.com, info@illumina.com www.illumina.com Isis Pharmaceuticals Inc. 1896 Rutherford Road Carlsbad, CA 92008 (760) 931-9200, (760) 603-4650 info@isisph.com www.isispharm.com NuVasive Inc. 4545 Towne Centre Court San Diego, CA 92121 (800) 455-1476, (858) 909-2000 info@nuvasive.com www.nuvasive.com DJO Inc. 1430 Decision St. Vista, CA 92081 (760) 727-1280, (760) 734-3595 ir@djortho.com www.djortho.com Halozyme Therapeutics 11588 Sorrento Valley Road, Suite 17 San Diego, CA 92121 (858) 794-8889 www.halozyme.com Arena Pharmaceuticals Inc. 6166 Nancy Ridge Drive San Diego, CA 92121 (858) 453-7200, (858) 453-7210 invest@arenapharm.com www.arenapharm.com Quidel Corp. 10165 McKellar Court San Diego, CA 92121 (858) 552-1100, (858) 453-4338 ir@quidel.com www.quidel.com Acadia Pharmaceuticals Inc. 3911 Sorrento Valley Blvd. San Diego, CA 92121 (858) 558-2871, (858) 558-2872 info@acadia-pharm.com www.acadia-pharm.com Ligand Pharmaceuticals Inc. 10275 Science Center Drive San Diego, CA 92121 (858) 550-7500, (858) 550-1826 investors@ligand.com www.ligand.com Cypress Bioscience Inc. 4350 Executive Drive, Suite 325 San Diego, CA 92121 (858) 452-2323, (858) 452-1222 ir-info@cypressbio.com www.cypressbio.com Neurocrine Biosciences Inc. 12790 El Camino Real San Diego, CA 92130 (858) 617-7600, (858) 617-7602 ir@neurocrine.com www.neurocrine.com Senomyx Inc. 4767 Nexus Centre Drive San Diego, CA 92121 (858) 646-8300, (858) 404-0752 info@senomyx.com www.senomyx.com Dexcom Inc. 5555 Oberlin Drive San Diego, CA 92121 (858) 200-0200, (858) 200-0201 www.dexcom.com Somaxon Pharmacueticals Inc. 3721 Valley Centre Drive, Suite 500 San Diego, CA 92130 (858) 509-3670, (858) 509-1589 info@somaxon.com www.somaxon.com Vical Inc. 10390 Pacific Center Court San Diego, CA 92121 (858) 646-1100, (858) 646-1150 info@vical.com www.vical.com Market Cap On Oct. 9, 2007 Ticker Symbol Fields Of Research Major Products Executive(s) and Title(s) Year Established

1

$6,337,923,000

AMLN

Developing innovative medicines to improve the lives of people with metabolic diseases

Smylin, Exentide, Exenatide LAR, AC2592 (GLP-1), AC3056, AC 162352 (PYY[2-26])

Daniel M. Bradbury, President/CEO; Alain D. Baron, Sr. VP, Research; Mark G. Foletta, CFO/Sr. VP, Finance; Mark J. Gergen, Sr. VP, Corporate Development

1987

2

$3,909,779,000

IVGN

Gene cloning and expression, electropharesis, protein purification, characterization and production, enzyme chemistry, molecular labation and detection

Research tools in kit form, catalog, custom products and services for biotechnology and biopharmaceutical Gregory T. Lucier, Chairman/CEO; David F. Hoffmeister, Sr. researchers and companies worldwide VP/CFO; Karen S. Gibson, Sr. VP/CIO for life science discovery, development and production

1987

3

$3,716,121,000

GPRO

Rapid, accurate nucleic acid tests to Nucleic acid diagnostics for human disdiagnose human diseases and screen ease donated blood

Henry L. Nordhoff, Chairman/President/CEO

1983

4

$3,242,184,000

RMD

Sleep-disordered breathing

Devices to treat sleep-disordered breathing and other respiratory disor- Peter C. Farrell, Founder/CEO; Kieran Gallahue, President ders

1989

5

$3,128,722,000

ILMN

Large-scale analysis of genetic variation and function

Integrated array-based systems, reagents, software and services for large scale genetic analysis including genetyping and gene expression profiling

Jay T. Flatley, President/CEO; Christian Cabou, Sr. VP, General Counsel; Christian Henry, Sr. VP/CFO; Arthur Holden, Sr. VP/Corp. Market Development; Tristan Orpin, Sr. VP, Commercial Operations; John Stuelpnagel, DVM, Sr. VP/COO/General Manager, MicroArray Business; John West, Sr. VP, General Manager, DNA Sequencing

1998

6

$1,356,947,000

ISIS

RNA-based drug discovery and development to treat metabolic, cardiovascular, inflammatory and viral diseases, and cancer; biosensor to identify infectious organisms; small molecule drugs that bind to RNA

RNA-based drug discovery and develStanley T. Crooke, Chairman/CEO; B. Lynne Parshall, opment to treat metabolic, cardiovasDirector/Exec. VP/CFO/Secretary; Jeffrey M. Jonas, Exec. VP; cular, inflammatory and viral diseases, C. Frank Bennett, Sr. VP, Research and cancer

1989

7

$1,276,284,000

NUVA

Medical device company

Spine surgery products

Alexis V. Lukianov, Chairman/CEO; Keith Valentine, President/COO; Kevin C. O’Boyle, Exec. VP/CFO

1995

8

$1,173,975,000

DJO

Orthopedics

Products and services for the orthopedic sports medicine market

Leslie H. Cross, President/CEO; Vickie Capps, CFO/Principal Accounting Officer/Exec. VP/Treasurer; Luke T. Faulstick, COO

1978

9

$661,048,100

HALO

Therapeutics and biopharmaceuticals

cGMP Halozyme’s first recombinant Jonathan E. Lim, President/CEO/Director; Gregory I. Frost, human enzyme Cumulase and Hylenex VP/CSO/Director; David A. Ramsay, MBA, VP/CFO; Robert L. Little, VP/CCO

1998

10

$659,977,400

ARNA

G protein-coupled receptors

Drug discovery and development

Jack Lief, Chairman/President/CEO; K.A. Ajit-Simh, VP, Quality Systems; Dominic P. Behan, Director/Sr. VP/CSO; Robert E. Hoffman, VP, Finance/CFO

1997

11

$656,498,500

QDEL

Reproduction, infectious diseases, general health screening, bone health and autoimmune disorders

Manufactures and markets point-ofcare rapid diagnostic tests for the detection of medical conditions and illnesses

Mark Pulido, Chairman; Caren L. Mason, President/CEO; Thomas Brown, Vice Chairman; Rod Dammeyer, President

1979

12

$589,298,000

ACAD

Central nervous system disorders

Drug discovery and development for the treatment of central nervous system disorders

Uli Hacksell, CEO; Thomas H. Aasen, VP/CFO/Secretary/Treasurer

1993

13

$563,291,600

LGND.PK

Cancer, pain, dermatology, men’s and women’s health, osteoporesis, metabol- Avinza, ONTAK, Targretin capsules, ic disorders, cardiovascular and inflam- Targretin gel, Panretin gel matory diseases

John Higgins, President/CEO; Martin Meglasson, VP, Discovery Research; Zofia Dziewanowska, VP, Clinical Research; Syed Zazmi, VP, Business Development Strategic Planning; John Sharp, VP, Finance/CFO

1987

14

$558,159,700

CYPB

Providing products for the treatment of patients with functional somatic synDrugs and drug development dromes and other central nervous system disorders

Jay D. Kranzler, Chairman/CEO; Sabrina Martucci Johnson, Exec. VP/CBO/CFO; R. Michael Gendreau, VP, Clinical Development/CMO; Srinivas G. Rao, CSO

1981

15

$385,597,000

NBIX

Insomnia, anxiety, depression, diabetes, multiple sclerosis, irritable bowel synBiotechnology and drugs drome, eating disorders, pain and autoimmunity

Joseph A. Mollica, Chairman; Gary A. Lyons, President/CEO; Kevin Gorman, COO; Tim Coughlin, CPA, VP/CFO

1992

16

$362,265,300

SNMX

Products relevant to taste and olfaction

Discovery and development of savory, Kent Snyder, President/CEO; Mark J. Zoller, CSO/Exec. VP, sweet and salt flavors Discovery and Development; John Poyhonen, CFO/CBO/Sr. VP

1998

17

$302,429,300

DXCM

Glucose monitoring in people with diabetes

Continuous Glucose Monitoring systems

Terrance H. Gregg, President/CEO; Jess Roper, Interim CFO

1999

18

$208,866,200

SOMX

Pharmaceuticals

Silenor

Kenneth M. Cohen, President/CEO; Susan E. Dube, Sr. VP, Corporate Development

2003

19

$198,318,400

VICL

DNA vaccines for infectious diseases, Gene-based vaccines and pharmaceutigene-based cancer immunotherapies, cals for human therapy gene-based therapeutic proteins

Vijay B. Samant, President/CEO; Jill Church, VP/CFO/Secretary; Robin Jackman, Sr. VP, Business Operations; Alain Rolland, Sr. VP, Product Development

1987

20

La Jolla Pharmaceutical Co. 6455 Nancy Ridge Drive San Diego, CA 92121 (858) 452-6600, (858) 452-6893 www.ljpc.com

$161,075,700

LJPC

Antibody-mediated diseases

Riquent, Toleragen, LJP 1082

Deirdre Gillespie, President/CEO; Niv Caviar, Exec. VP/CBO/CFO

1989

Data Source: Company Web sites, Bloomberg. Ranked by Market Cap on Oct. 9, 2007. This is a partial list; a more complete listing can be found at sourcebook.sddt.com. N/A: Not Applicable, n/a: not available, wnd: would not disclose. It is not the intent of this list to endorse its participants, nor to imply that a company's size or numerical rank indicates its quality or service. We reserve the right to edit listings or to exclude a listing due to insufficient information. Last updated 10/2007.

THURSDAY, OCTOBER 18, 2007 •

Inside Biotech • THE DAILY TRANSCRIPT

5

Close-up: Kent Snyder

Senomyx savors market niche in science of flavor enhancement
By ELIZABETH MALLOY
The Daily Transcript

The next time you bite into a Nestlé’s candy or down a cold Coca Cola, know that the flavor rush might come courtesy of a San Diego laboratory. Senomyx (Nasdaq: SNMX) is a La Jolla biotech company that doesn’t create pills or insulin trackers, but flavors. The company has contracts with some of the biggest names in the food industry. But beyond just creating new versions of sweet and sour, the company is also trying to help the food industry make its products healthier, by creating compounds that allow foods to be less sugary or salty, without losing their taste. “We’re not really trying to create necessarily new flavors. Most of our programs improve the nutritional profile of the food and beverage products,” said Kent Snyder, president and chief executive officer of Senomyx. “In some cases we’re trying to modulate the taste of products, for example, by blocking the bitter taste.” From a business standpoint, this helps Senomyx carve out a nitch market. Other than a small company in New Jersey called Red Point Bio, there is a not a lot of competition. Large flavor companies like International Flavors and Fragrances (NYSE: IFF) in New York City, or Firmenich and Givaudan in Switzerland actually create flavors, as opposed to

working with taste modulators, which is what Senomyx does. Taste modulators are compounds that react with the tongue’s taste receptors. They’re similar to flavors, but rather than creating a certain taste, more often taste modulators make the tongue think something that would regularly feel salty, sweet or bitter feel less so. Senomyx collaborates with Coca Cola (NYSE: KO), Campbell’s, Nestlé, Cadbury Schweppes (NYSE: CSG), Kraft (NYSE: KFT), Sole and the Japanese company Ajinomoto . The company conducts all research and development on site and discovers its own compounds. It licenses some technology, such as the science of taste receptors, and it does have a licensed compound library. Snyder said all the compounds that go into final development are discovered by Senomyx scientists. “What we’re trying to do is to find flavor ingredients that interact with the taste receptor itself,” Snyder explained. He used a project they are working on to reduce the amount of added sugar and sweetener in food as an example. “The way to look at it is it makes the taste receptor act more efficiently, so a lesser amount of sugar is required to activate that receptor. So it’s more healthy, but sends the same sweet taste signal to the brain as if you had some-

thing that’s fully sweetened.” To check if their flavor modifiers are working, Senomyx does taste testing on site in laboratory. Tasters are trained, then brought to a room where they sit in a booth and have flavors, or flavors cooked in food, pushed to them through a little door. A computer sits on a desk in front of them and they answer questions about what they taste. Tasters are served water and crackers to cleanse their pallets, as if they’re tasting wine. “We have panels of consumers that come in on a regular basis that are trained in certain tastes so they can detect those,” Snyder said. Senomyx was incorporated in 1998 and opened its labs in 2000. The company went public in 2004. The company’s stock has hovered around the $13 per share mark for the past six months, spiking as high as $15.14 in early June, and falling as low as $10.21 in early August. Snyder, a Kansas City native, came to Senomyx in 2001. Before that he’d spent about 11 years at Agouron Pharmaceuticals, which is now part of Pfizer (NYSE: PFE). The original technology for Senomyx came out of the University of California, San Diego. A professor named Charles Zuker characterized mammalian taste receptors, and Senomyx licensed the technology. Senomyx now has about 120 employees, 75 percent of whom are in R&D.

Photo: J. Kat Woronowicz

Kent Snyder, president and CEO of Senomyx, says his company is not necessarily trying to create new flavors, but rather find ways to make taste receptors act more efficiently. There is a small business development staff that tries to form new collaborations for the company with food vendors. Some of Senomyx’ products are on the market now. Nestlé is selling two products with the company’s savory flavor ingredient, though neither is currently available in the United States. From discovery until market generally takes Senomyx about five years. A lot of big food companies Senomyx works with have their own internal R&D teams, but they work more on the food itself. Snyder said his company’s part in the process is unique. “We’re doing something that’s quite different than what they’re doing,” Snyder said. “That’s why they have come to us.” elizabeth.malloy@sddt.com Source Code: 20071018crf

DNA decoding maps mainstream TechTIPS takes UCSD innovations to the public future; lower costs may make gene sequencing more common
Source: TechTIPS

University of California, San Diego’s Technology Transfer & Intellectual Property Services (TechTIPS), established in 1994, manages UCSD’s intellectual property. Through proper stewardship of university intellectual property and innovations, TechTIPS facilitates the transfer of UCSD innovations for the public benefit; enhances the research and education experience of the UCSD community; promotes and targets economic development by leveraging UCSD innovations; and provides incentives to researchers to stimulate technological innovations. TechTIPS matches academic innovations to business partners that are most suited to commercialize specific technologies. While serving and protecting the interests of the university and its researchers, TechTIPS actively markets available technologies with the goal of finding corporate partners to share in the risks and benefits of commercializing earlystage technologies.

From over $700 million in extramural research funding per year, UCSD researchers generate over 300 innovations annually. The School of Medicine, School of Pharmaceutical Sciences, Medical Center and Division of Biological Sciences exhibit UCSD’s strength in the health sciences sector by contributing significantly to this large portfolio with more than 60 percent of the innovations being life sciences/biomedical technologies. In recent fiscal years, over 70 licenses were granted annually to commercialize life sciences and physical sciences technologies. As part of our technology transfer mission, TechTIPS prefers to license technologies to local businesses to promote regional economic development. In some cases, licenses are granted as the founding technology of newly formed companies, creating new jobs and attracting venture capital to our region. To date, more than 100 startup companies have been formed with licensed innovations from the TechTIPS office.

TechTIPS organizes seminars and workshops to educate the university community on intellectual property and technology transfer, and networking events to promote university and industry interactions. In addition, TechTIPS cosponsors entrepreneurial/networking events, such as a startup bootcamp conference and an innovators’ showcase, that are open to the business community. Recently, to promote the licensing of university technologies, TechTIPS has supported a $50K Business Plan Competition organized by university students. For companies in search of new technologies, TechTIPS has more than 1,400 innovations available for licensing. In the biomedical/biotech area, the technologies include: therapeutics and pharmaceuticals, delivery systems, diagnostics, medical devices and research reagents and tools. A listing of available technologies can be found on the TechTIPS Web site at invent.ucsd.edu. Source Code: 20071018cri

By KEITH J. WINSTEIN
The Wall Street Journal

The Burnham Life Sciences Group: San Diego’s recognized leader in biotech real estate for 25 years
The Burnham Life Sciences Group is San Diego County’s oldest and most experienced real estate team specializing exclusively in meeting the unique needs of the biotechnology industry. Beginning with Hybritech’s first facility, the Burnham Life Sciences Group has continued to be San Diego’s leading provider of biomedical real estate services, routinely negotiating more than 65 percent of life sciences-related leases in the region. According to Brent Jacobs, a senior vice president with Burnham and founder of the Life Sciences Group, the team prides itself on being the real estate broker of choice for life sciences firms of any stage. “This sector of the commercial real estate industry is so specialized that it requires a higher level of attention, involvement and understanding of the industry itself,” said Jacobs, who is joined on the team by Greg Bisconti and Brian Cooper. “We are structured to provide the highest level of service possible to our clients, and we demonstrate our dedication to their success through personal involvement in promoting issues of importance to the industry.” The Burnham Life Sciences Group’s industry leadership is evident by its board-level involvement in organizations like BIOCOM and the Burnham Institute for Medical Research. “Not only does this help us to better understand the challenges these life science companies face, but we are able to better anticipate their needs and affect positive change on their behalf,” said Bisconti, whose roots as a financial analyst and experience as a broker in the tech-driven San Francisco Bay Area allow him to provide bottom-line technical analyses of each client’s real estate alternatives. As part of the CONNECT Framework workshops, he conducts annual seminars on common pitfalls in laboratory leases. Tracking trends and translating data into concrete recommendations for biotech companies is central to the value Burnham’s team provides to clients. The team tracks inventory and vacancy trends throughout San Diego’s lab market, and is the only group of its kind to produce an annual market report based on these findings. “Staying in front of where the market is moving is extremely important,” Cooper said. “By analyzing the trends in on- and off-market opportunities by submarket and square footage, we can provide realtime recommendations to our clients that no one else can.” Cooper has a hand in all aspects of marketing, analysis and transaction management, in addition to establishing new relationships. “Our constant and multilevel involvement in the local biotechnology community gives us an unmatched level of knowledge regarding the health and future plans of biopharmaceutical companies in the region,” he said. “Ultimately, our ability to anticipate market trends translates into maximum negotiating power for the companies we represent.” The Burnham Life Sciences Group is a specialized industry group within Burnham Real Estate, a company providing comprehensive real estate services to clients throughout the southwestern United States. Established in 1891 and headquartered in San Diego, the company has four regional offices in Southern California and one in Las Vegas. Company services include traditional brokerage along with corporate services, asset services, capital markets, advisory services, strategic corporate consulting and project management. Visit the Web site at www.burnhamrealestate.com.

Submitted by Burnham Real Estate

This past summer, biologist J. Craig Venter published his own complete genetic blueprint on the Internet, a multiyear effort that cost more that $60 million. Now, Dr. Venter is decoding himself again, this time using new, less costly technology. He hopes by December to redo the gene job for just $300,000. The price of reading a person’s genome is plummeting, raising hope for new medical discoveries and cures. It cost the Human Genome Project $3 billion to extract the first complete genetic blueprint, which was completed in 2003. Now four companies are racing to bring the cost to below $10,000. At that price, it may become more common for patients to have their genes sequenced for medical tests. Cancer researchers hope to use sequencing to learn what went wrong in the DNA of cells that became tumors. Drug companies hope to usher in an era of personalized medicine with custom-made medicines that change cell behavior. Whichever company reaches the $10,000 mark first has a shot at winning a $10 million prize offered by the X Prize Foundation, based in Santa Monica, Calif., which is trying to encourage faster and cheaper gene sequencing. “Once people see the value of this information, nobody will want to go backwards,” says Venter, who has put up $500,000 of the prize money. The contenders — Illumina Inc. (Nasdaq: ILMN), of San Diego; Applera Corp. ’s (NYSE: ABI) Applied Biosystems unit in Foster City, Calif.; Roche Holding AG’s (NYSE: AG) 454 Life Sciences in Branford, Conn.; and Helicos BioSciences Corp. (Nasdaq: HLCS), of Cambridge, Mass. — haven’t achieved the $10,000 level yet. It currently costs between $300,000 and $3 million to sequence a genome. But with better chemicals and faster computers, the companies say, the cost will fall to $10,000 within a few years. One reason for the advances is that sequencing machines no longer have to start from scratch. Human DNA is made up of 23 pieces, or chromosomes, and each chromosome has roughly 100 million chemical letters arranged like beads on a string — A’s, T’s, C’s and G’s. It isn’t possible today to read 100 million letters at a time, so to sequence a person’s DNA, researchers traditionally chopped up the chromosomes into overlapping pieces, each about 700 letters long.

In both the government-funded Human Genome Project and Venter’s first effort, scientists used a technique invented in the 1970s called Sanger sequencing to input each piece into a computer. Then the overlapping pieces were put back together, with software, to form an entire chromosome, a painstaking process somewhat like putting together a jigsaw puzzle without a picture on the front of the box. The new machines take advantage of those existing genetic blueprints — in effect, supplying the missing picture. Instead of dividing chromosomes up into 700-letter strings, the new sequencers make the jigsaw pieces much smaller — sometimes 25 or 30 chemical letters long — and read many pieces at once. For example, Helicos’ machine, which isn’t yet on the market, will be able to scan in at least 300 million such pieces simultaneously, compared with just 96 for the older machines. The newer machines run faster than the old methods and require fewer chemicals, which account for the bulk of gene sequencing costs. The new machines match the tiny pieces to where they fit best on the existing genetic blueprints, a process known as “resequencing.” To date, only one new machine has successfully resequenced a human genetic blueprint — Roche’s 454 Genome Sequencer FLX, which costs about $500,000. This summer, the company assembled the genes of James Watson, the DNA pioneer, by putting together pieces of his DNA about 250 letters each on top of the blueprint published by the Human Genome Project. The company estimates it costs about

$2 million to $3 million, and takes about a month, to sequence a human genome with its machine. Venter says he plans to resequence his own DNA for $300,000 using a new machine from Applera called the Solid System. The aim is to test the accuracy of the new, faster systems, and compare them against the copy of Venter’s DNA published this summer using the old method. After that, his research institute plans to sequence between 10 and 30 human genomes in 2008, with the goal of finishing 10,000 such sequences in the next 10 years. Illumina says it has sold more than 100 of its sequencers, known as the Genome Analyzer. The company also is one of the biggest sellers of DNA arrays, or “gene chips,” a hot product that allows doctors and researchers to test if patients have certain genes. Sequencing, which can test for every single gene at once, threatens to make such chips obsolete, if it can be made more affordable. “What we’ll see is sort of a gradual transition in the marketplace as sequencing becomes easier and cheaper,” said Adam Lowe, a spokesman for Illumina. Another candidate in the race is Helicos’s Heliscope, which the company calls the first “DNA microscope.” Unlike the other machines, Helicos’ skips a step where pieces of DNA are duplicated before being read into a computer. Helicos says that will make its machine cheaper and easier to operate. The company estimates its equipment, set for release later this year, will cost $2 million. With it, the price of sequencing a person’s genome will drop to $100,000, the company says. Source Code: 20071018crl

625 Broadway ste. 1210 San Diego, CA. 92101

(619) 238-1179 )

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THURSDAY, OCTOBER 18, 2007 •

Inside Biotech • THE DAILY TRANSCRIPT

Biotech roundtable

Research, entrepreneurial spirit continue to attract life-sciences companies to region
By ELIZABETH MALLOY
The Daily Transcript

There was hand wringing in San Diego’s life science community last year when three of the most prominent research institutes accepted incentives from Florida to open campuses there. But one local leader says San Diego shouldn’t be

afraid of the Sunshine State. “We’ve got a 30-year history here of building a foundation from the ground up,” said Joe Panetta, president and chief executive officer of the local biotech trade organization BIOCOM, speaking at a recent Daily Transcript roundtable discussion. “You don’t create

Magda Marquet, co-president and CEO of Althea Technologies, said the city of San Diego doesn't have to do much to entice biotech compa nies to the area because “we all want to come here.”

Paul Laikind, founder and CEO of Metabasis Therapeutics, said biotech companies see each other more as fellow collaborators than competi tors.

a biotech industry overnight, and you certainly don’t create one of the magnitude and at the level of success we have here overnight.” San Diego’s life-sciences community boasts about 500 companies of varying size, has created 35,000 to 45,000 new jobs and has an economic impact of $8 billion to $9 billion, Panetta said. In other parts of the country, like Florida, state and local governments have made a big push to bring more biotech jobs to the area, as it’s a high-paying, clean industry, with strong future growth implications. San Diego’s local government has not offered much in terms of incentives for people to come to San Diego, Panetta said, but in many ways, it doesn’t have to. Other members of the life science community agreed. “The reason San Diego doesn’t do anything is that we all want to come here, so they don’t need to,” said Althea Technologies coPresident and CEO Magda Marquet, who herself came to San Diego years ago from the small European country of Andorra. “Other places, they’ll give you land for free, they’ll give you labs for free, they’ll give you equipment, but you still don’t want to go.” San Diego’s weather and the business community’s entrepreneurial spirit are two big draws for the area, life science officials said, but its history of biotech research is what keeps it thriving. The Salk Institute, the University of California and the Scripps Research Institute were all early science pioneers, which fostered an environment of ideas and begat companies. Paul Laikind, the founder and CEO of Metabasis Therapeutics (Nasdaq: MBRX), said biotech is different from most industries in that companies see each other more as fellow collaborators than competitors — and that’s especially true in San Diego. Panetta said BIOCOM was created to encour-

The weather, the business community’s entrepreneurial spirit and the history of biotech research are what keep the industry thriving in San Diego, said participants in a recent roundtable discussion. age that sense of community, and he thinks it’s why the industry has thrived in San Diego. “You’ve got the people, the dollars, the science and then throw in the collaboration, and those are the elements (for success),” Panetta said. Yet the life science industry is at a disadvantage when it comes to investors. It takes so long for an idea to evolve into a treatment that Wall Street often keeps a distance. Chris Brunley of the young company Phenomix Corp. said most of his investors are in the Bay Area. Phenomix set up in San Diego, though, because company founders liked being close to the sources generating new technology and to the deeply rooted community here. Now that some big pharmaceutical companies such as Pfizer (NYSE: PFE) have set up branches in San Diego, smaller companies see licensing or partnership opportunities as well. Brunley said even a company of Phenomix’s small size doesn’t need a lot of help from the municipal government. According to

Joe Panetta, president and CEO of BIOCOM, said one reason the biotech industry has succeeded here is the environment of collaboration. Panetta, the one way San Diego can help is to understand what the life science industry does need from local government. In recent years, he said, the city of San Diego has become a good partner. “Where this city’s been terrific, I think, is in creating efficiencies in permitting and on the regulatory side, and just simply understanding the biotech business in a way that’s made it easier for companies to go in and do business with the fire marshal or the building department,” Panetta said. “That wasn’t the case 15 years ago.” elizabeth.malloy@sddt.com Source Code: 20071018crg

New FDA drug research center holds promise, but critics say industry influence poses worrisome risk
By MATTHEW PERRONE
AP Business Writer

WASHINGTON (AP) — The Food and Drug Administration is moving with unprecedented speed to launch a drug research center to be paid for by companies it regulates. The goal of the Reagan-Udall Foundation, approved by Congress and signed into law late last month, is to streamline and improve the development of drugs and medical devices, a goal long sought by regulators and the biggest players in the industry, such as Merck & Co. Inc. (NYSE: MRK), Pfizer Inc. (NYSE: PFE), Wyeth (NYSE: WYE), GlaxoSmithKline plc (NYSE: GSK) and Johnson & Johnson (NYSE: JNJ).

At a time when the FDA’s reputation has been battered by perceptions that it is lax on some safety issues and too cozy with drug makers, consumer advocates say the loosely defined partnership increases the agency’s vulnerability to industry clout despite its promise of groundbreaking success. It’s an ambitious undertaking that puts regulators and companies in a relationship unlike that of any other industry. Congress required fast-track creation for the foundation. The FDA filed a public notice Oct. 3 that it was accepting board nominations and will name board members Oct. 27. Drug industry executives will likely hold four seats on the center’s 14-member board. The rest will be academics,

consumer advocates and physicians, with no voting seats for FDA commissioners or staff. The board’s makeup could allow drugs to be developed more cheaply, improving pharmaceutical industry profits, but not necessarily result in safer and less expensive drugs for consumers, critics worry. “Given FDA’s track record in the past, I’m not confident in their ability to create something that is free of influence from industry,” said Francesca Grifo, a director at the Union of Concerned Scientists. Her group and others have argued the agency has become too accommodating to drug companies the past 25 years, after they began paying FDA user fees for the review of drug applications.

“Time and again, we’ve seen that people within FDA behave as if industry is their primary client,” Grifo said. Sen. Edward M. Kennedy, DMass., a co-sponsor of the bill to create the foundation, says the bill requires “effective safeguards to ensure that the foundation is independent of both the FDA and its donors, whether those donors are from industry or are charitable organizations.” Reagan-Udall “will make new research tools and techniques available to the entire research community, shortening the time it takes to develop new drugs and reducing costs for patients,” Kennedy added in an e-mailed response. However, the law creating the

Biotech group pools efforts to meet industry needs
By SANDRA SLIVKA and SUSAN BAXTER
San Diego Biotechnology Education Consortium

Increasingly, college graduates and scientists are unable or finding it extremely difficult to transition from academic degree programs or research institute positions to local life-sciences companies due to their lack of understanding of the commercial work environment and unique industry fundamentals. Conversely, lifesciences companies in San Diego continue to recruit more experienced employees from other regions or other local companies to fill their open positions, rather than investing in on-the-job training of local talent. This is not a sustainable practice for the region due to the expense from financial, human resources and regional work force development perspectives. A consortium of universities, community colleges and industry associations in the San Diego region plans to jointly offer a “Life Science Industry Immersion Course” to address these unmet needs, from both the candidate and employer perspectives.

The San Diego Biotechnology Education Consortium was founded in 2004 to serve the San Diego biotechnology industry by supporting increased collaboration and articulation among member educational programs, assessing and addressing industry needs, and facilitating placement of interns within the industry. Participating consortium members include: BIOCOM, the regional industry organization with more than 550 members; CONNECT, which fosters technology and life-sciences business entrepreneurship in the San Diego region; the San Diego Workforce Partnership, which provides employment-related services to local businesses and job seekers through a network of countywide One Stop Career Centers; the California State University Program for Research and Education in Biotechnology (CSUPERB), which provides vision, leadership and support for biotechnology education and research throughout the CSU system to promote biotechnology in California; San Diego State University; California State University, San Marcos; University

of California, San Diego Extension; and the Southern California Biotechnology Center, San Diego Miramar College, whose mission is to promote work force development through the California Community College System. The consortium plans to jointly offer an intensive certificate as a four-week program for the first time in summer 2008. The program will be characterized by a competitive admissions process; a high-quality, industry-driven curriculum; and involved, industry partnerships and sponsors. Student participants will be skilled scientists, with doctorates or five years post-baccalaureate experience in a research setting. Expert faculty, drawn from participating organizations and local industry, will present principles and practice associated with life sciences product, process and regulatory development. Curriculum modules will feature high level, expert introductions to topics that encompass the breadth of business and financial principles, as well as exposure to regulatory, ethics, legal, product development, GXPs, marketing,

“must-know” vocabulary and job search preparation. The program will include in depth, real-world case studies and team projects. Certificate holders will have practical understanding of life-sciences business and functional business areas, familiarity with the local San Diego business environment, and networking opportunities with industry representatives and experts. The aim is to transition skilled researchers in the region into industrial careers, while also shortening the orientation time companies expect as new hires fit into the team-based, multidisciplinary corporate culture. Companies and students interested in the program should contact Sandy Slivka at (619) 3887490 or Susan Baxter at (619) 594-2822.

Slivka is director of the Southern California Biotechnology Center at Miramar College, and Baxter is executive director of the California State University Program for Education and Research in Biotechnology. Source Code: 20071018crj

center leaves crucial decisions to the appointed board — from where the center will be located to how funds will be collected from companies and distributed for research. And there are many unanswered ethical questions, such as who will own patents obtained from the foundation’s research and how any potential profits would be shared or distributed. One crucial issue, though, seems to have been decided, according to FDA Deputy Commissioner Janet Woodcock: “The FDA intends to put forward a variety of research projects that we think are important, but as with any foundation, the donors will have the primary say over how the funds are used.” Company executives say it’s premature to comment on questions about Reagan-Udall, but they do say, as do FDA officials, that they hope the foundation reverses an alarming imbalance between how much companies spend on drug research and the number of drugs making it to market. Drug R&D spending hit $43 billion in 2006, a 150 percent increase the past decade compared with a 2.5 percent rise in the number of new FDA drug applications during that period. The problem is time and money. Companies on average spend almost 15 years and $1 billion to get a new drug to market, according to the Pharmaceutical Research and Manufacturers of America. The drug development process can involve tracking up to 15,000 patients taking a drug for as long as five years. At Reagan-Udall, FDA scientists, with private-sector funding, are hoping to do world-class research not being done elsewhere while giving pharmaceutical companies a role in developing more effective drug approval methods and standards. It’s part of the FDA’s Critical Path Initiative, unveiled in 2004, which calls for the agency to work with industry and academia to speed the “critical path” a drug

travels from discovery to market. But critics question the potential trade-offs. “FDA’s primary role is regulating drugs and protecting the public health,” said David Ross, a former FDA safety reviewer at the Department of Veterans Affairs. “If you start blurring that line between regulation and collaboration, you have real problems.” For example, Ross, who left the FDA last year over a drug safety dispute, is concerned, as are others, that the FDA might be persuaded to quickly adopt a controversial drug-testing process that uses biological indicators, such as blood pressure and cholesterol levels, to determine a drug’s safety. Drug companies have taken the unusual step of sharing research data on these indicators, called biomarkers, to see if the size and duration of patient drug trials can be reduced. Some critics call their use a high-risk gamble. “Biomarkers are a bit like dynamite in that they can be extremely useful but they can cause a lot of damage,” Ross said. He cites a biomarker that suggested irregular heart rhythms were a key predictor of fatal heart attacks. Using the assumption, doctors prescribed heart-regulating drugs to millions of patients in the 1980s, but abruptly halted the practice in 1989 when a long-term study revealed patients were actually more than twice as likely to die of sudden heart failure. FDA officials counter that HIV biomarkers have turned out be a reliable predictor of survival for patients susceptible to AIDS, a disease that can fatally damage the body’s ability to fight off serious illness. Rachel Behrman, who heads FDA’s Office of Critical Path Programs, says it’s too early to know whether biomarker research would be an initial project. She wants to focus on the opportunities the center will offer. “This has to do with being smarter,” Behrman said. “That’s what this initiative is about.” Source Code: 20071018crn

All photos by: J. Kat Woronowicz

THURSDAY, OCTOBER 18, 2007 •

Inside Biotech • THE DAILY TRANSCRIPT

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Work force
Continued from Page 1

gained insight into the demands of employers and the working environment of the biotech industry, all of which allowed me to excel in my internship at Pfizer.” For teachers — who are the keys to developing the region’s future work force — the institute provided direct experience with biotechnology, medical device, diagnostic and related industry areas. They gained hands-on laboratory curriculum training, company externship experiences and curriculum integration, along with opportunities to share and network. The two-week paid program, hosted in Biogen Idec’s (Nasdaq: BIIB) Community Lab, included one week of industry introduction and laboratory curriculum training based on the Amgen-Bruce Wallace Biotechnology Laboratory Program, followed by a week of industry experiences, curriculum connections, and implementation workshops. It is estimated that each teacher reaches an average of 189 students per year. To date, the institute’s Student Internship Program has placed 118 students into hands-on industry internships. The institute’s Teacher Externship Program has empowered 54 teachers with the latest industry-based techniques and curriculum. In turn, they will have exposed over 16,000 students to state-of-the-art career training and information by the end of the 2007-’08 school year. This innovative approach was made possible by a President’s High Growth Job Training grant from the Department of Labor and administered through the San Diego Workforce Partnership. “This program has been a valuable resource to local, state and national work force development efforts,” said Joseph Panetta, CEO of BIOCOM, the Southern California life-sciences association with more than 550 member companies. “Further funding for this initiative will provide science education and training programs designed to produce a homegrown work force that will address the future growth of the life-sciences industry.”

The grant has provided the program with funding for the past three summers. However, as with any grant, sustainability of successful programs becomes an issue. The program costs about $225,000 per year to run. If just 15 companies invest $15,000 for the summer 2008 program, it would mean an additional 25 teachers could be trained and 50 students placed into internships. “Companies can also invest in the program by sponsoring individual students for $2,000 and teachers for $5,000,” Wildrick said. “Each teacher trained will go on to reach approximately 180 students each year, increasing the investment exponentially.” Sharma added: “I have benefited tremendously from this experience, and I feel that students have a lot to gain from programs like these. Providing programs such as LSSI is an investment in the future of our students, as well as the future of scientific research.” Other partners who have made the Institute possible include BIOCOM, Biogen Idec, Invitrogen Corp., Southern California Biotech Center at Miramar and the Amgen Foundation. Participating company hosts included: Accumetrics, Alexion Antibody Technologies, Anadys Pharmaceuticals (Nasdaq: ANDS), Arena Pharmaceuticals (Nasdaq: ARNA), Assure Controls Inc., BioServ Corp., Burnham Institute for Medical Research, Conatus Pharmaceuticals, Conservation and Research for Endangered Species (CRES), The Dow Chemical Co., eStudySite, Genentech (NYSE: DNA), Genomatica, Genoptix, Gen-Probe (Nasdaq: GPRO), Isis Pharmaceuticals (Nasdaq: ISIS), Karl Strauss Brewing Co., Nanogen , (Nasdaq: NGEN), Pfizer, Salk Institute for Biological Studies, San Diego State University Labs, Santaurus, SGX Pharmaceuticals (Nasdaq: SGXP), SCBC Miramar, SkinMedica, Sunrise Science Products and The Scripps Research Institute. For more information on the program, contact Ashley Wildrick at the San Diego Workforce Partnership, (619) 228-2965. Source Code: 20071018crd

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Inside Biotech • THE DAILY TRANSCRIPT

Entrepreneurs
Continued from Page 1

Crooke
who have been successful and done it all before; this certainly lends credibility.” Ultimately, serial entrepreneurships offer a boon to the San Diego economy. “Right now we are seeing large amounts of money going to investments that will yield revenue — products that are close to being developed and approved,” Mejia said. Last year, according to Ernst & Young/Dow Jones Venture One, venture capital investment in Southern California for the life science industry topped $900 million. Despite the never-ending procession of new businesses, there is a cohesiveness and synchronicity within San Diego’s biotech industry — the players often depend on each for collective brainpower. Greene said he enjoys lending his expertise to the younger generation, many of whom have worked for him in the past: “It’s like having grandchildren, all of the fun, none of the headaches.”
Continued from Page 3

a rigid system, we like to question things, so when companies grow beyond expectations and what we enjoy, we pass the baton,” Greene added. Not surprisingly, it takes a certain personality type to be a serial entrepreneur. “The types of people who start biotech companies are typically uncomfortable in large, conservative corporations,” he said. “They are risk takers. In a large corporate environment, they can’t take the same risks.” Panetta agreed. Most serial entrepreneurs are intrigued by the “excitement and vision of early-stage company growth, not the day-to-day operations of a large commercial

entity. Frequently, they will get to a certain stage, then move on or sell the company.” The end result is ultimately good for science — and good for San Diego. “Creating companies more quickly than companies are going out of business or merging creates a good distribution of companies at every level,” Panetta said. A boon to the economy Serial entrepreneurs also help spawn a temperate climate for venture capital. “Past successes certainly attract venture capital,” said Richard Mejia, director of life sciences for the pacific southwest region of Ernst & Young. To a large degree, “venture capitalists are looking for people

Moore is a San Diego-based freelance writer. Source Code: 20071018cra

The stock hovered around $3 a share two years ago and trades at about $17 today. “This makes the ability to acquire capital from the public market much easier,” he said. “The financial market is beginning to recognize the potential value of the drugs and the technology that we’ve created.” The company, Crooke said, has achieved success through the intensity, work efforts and commitment of team members. Isis has had extraordinarily low turnover,

he added, not because the road has been easy, but because of the quality of the dream. “No one ever claimed that working at Isis was easy. It’s demanding, but I do think it’s rewarding, and most people stay because it’s an environment where intelligence and innovation are rewarded,” he said. “And what we’re trying to do has great merit.”

Klam is a San Diego-based freelance writer. Source Code: 20071018cre

Stem cell
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VC biotech
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the trends and directions in venture funding before raising money is essential. Meet with venture firms prior to formally raising a new round of financing. This approach provides knowledge on the expectations and preferences of the investors. The feedback can be used to design programs, obtain insight into commercial implications and determine the competitive landscape. Use the time in between rounds of fundraising to build relationships and meet with venture capitalists to receive feedback. After explaining what the company does, follow up with questions, such as: Do you like the story? If we get to the next point in our programs, would you be interested in hearing the story again? Would you invest in the company at point B to get to point C? A “no” answer to any of the above questions leads to an

opportunity to listen and learn. Phenomix asked investors to expand on how the company did not fit their investment strategy. Listening and learning, Phenomix began utilizing its technology platform for drug discovery in the second year, so that drugs were in the pipeline by the next round of fundraising in 2004. The Phenomix approach may be longer and more time-consuming, but the resultant relationship that is built will help the company and its investors survive difficult periods, such as development hurdles or direction shifts. Regular communication with a company’s investors establishes a higher level of trust that the company will handle the issues and deliver on its promises.

Shawver is chief executive officer, and Burnley is executive vice president and chief operating officer at Phenomix Corp. in San Diego. Source Code: 20071018crh

egg, a process that can mimic normal fertilization for a short time. Because these “parthenogenetic” embryos are incapable of reproduction, it is expected that they will be less controversial than stem cells derived from reproductively viable embryos. Stemagen also has been expanding its work in somatic cell nuclear transfer (SCNT), commonly called “therapeutic cloning.” The company currently anticipates an upcoming announcement on its achievements in this discipline thus far. When Proposition 71 was passed, the legislation called for the creation of an oversight body called the California Institute for Regenerative Medicine (CIRM) to handle the disbursal of grants and monies. CIRM Chairman Robert N. Klein said, “The strong participation of individual investors in the first sale of stem cell research bonds is deeply gratifying. Certainly many of the investors are patients suffering from debilitating disease or injury. They’re making an investment in their future — not simply their financial future, but their future quality of life. We are grateful to all

of them for their continued support. We very much appreciate the efforts of State Treasurer Bill Lockyer, his deputy, Paul Rosenstiel, his staff, and all the underwriters for making this historic bond offering so successful.” While so far Proposition 71 funds have been only available for nonprofit organizations, Stemagen’s Wood said he expects CIRM to begin issuing for-profit applications sometime in early 2008. He calls that a necessary step. “Sometimes when you apply a ‘business’ approach to research, you’re able to be more efficient and make more progress,” he said. “When CIRM makes Prop. 71 funds available to for-profit companies like Stemagen, we will have to continue to show real progress.” Fortunately, Wood feels Stemagen is already uniquely positioned to stand out among its friendly competitors because of its notable work and staff, led by Chief Scientific Officer Andrew J. French, acknowledged worldwide as an expert in SCNT and other mammalian cloning technologies. “With our scientific platform led by one of the most experienced sci-

entists in the world,” Wood said, “we feel confident in our abilities to attract funding when the time is right.” Now, with the unexpectedly strong response from individual investors in stem cell bonds, that funding was made all the more available. The interest rate on the bonds will be 5.168 percent, which is more than one percentage point above the current rate on a three-year U.S.

Treasury note. The $250 million sale will provide the nation’s largest-ever state investment in human embryonic stem cell research. It also marks the first time general obligation bonds have ever been used to directly finance the development of intellectual capital.

Jimenez is a San Diego-based freelance writer. Source Code: 20071018crb

Salk Institute
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Juan Carlos Izpisúa Belmonte, a professor in the Gene Expression Laboratory, garnered international attention most recently when he and his team published a study explaining how they regenerated the wing of a chick embryo — a species not known for its ability to regrow limbs. By manipulating a specific cellsignaling pathway, Belmonte was able to deactivate the system in animals with the ability to regrow limbs (salamanders, frogs and zebra fish), while activating it in chick embryos, which regenerated a perfectly functioning wing after removing the original appendage. The study suggests that the potential for such regeneration exists innately in all vertebrates, including humans. While manipulating the same system in humans is not possible at this point, Belmonte hopes these findings may eventually offer insights into current research examining the ability of stem cells to build new human body tissues and parts. The Salk Institute’s stem cell program has continued to strengthen with the help of philanthropic contributions and more than $7.4 million in grants provided by the California Institute for Regenerative Medicine. Construction is already underway at Salk on a new stem cell core facility that will serve as a

training center for the next generation of scientists who work in this very promising field of research. Further securing Salk’s commitment to this emerging field is the institute’s participation in the San Diego Consortium for Regenerative Medicine. Salk’s contribution to this historic partnership is its team of established stem cell experts as well as scientists whose work in gene expression and related fields is central to understanding how stem cells can be developed for therapeutic purposes. Looking ahead, the institute is also interested in the burgeoning field of live cell imaging and biophotonics, which uses single quantum units of light to “see” molecules. Applying such advanced technology overcomes the resolution limit of light microscopy and enables scientists to understand how single molecules and cells function in real time and decipher what goes wrong when they malfunction. Knowledge gained from this advanced technology will help resolve still-unanswered questions surrounding many human conditions. It will also enable Salk scientists to ask new questions about biological systems, transform the way they analyze complex systems such as the brain and revolutionize the way diseases are treated. Source Code: 20071018crc

BIOCOM Investor Conference to showcase biotech, med tech firms
Source: BIOCOM

Offering investors an easy way to learn more about the Southern California life science industry, BIOCOM will host its second annual BIOCOM and Montgomery & Co. Investor Conference on Nov. 1 and 2 at the San Diego Marriott Del Mar. With 58 companies presenting, the conference gives both public and private life science companies a chance to give their 20minute investor presentations to a wide variety of venture, private equity, institutional and retail investors. “Very rarely does a small private startup like Tracon Pharmaceuticals get to present alongside established biotech leaders like Amylin Pharmaceuticals ,” said Ian Wisenberg, BIOCOM’s senior vice president. “We want this conference to become the place for Southern California biotech, med tech and device companies to be able to showcase themselves.” Established as part of BIOCOM’s broader efforts to raise the amount of investment in and awareness of the region’s life science companies, the investor conference is in its second year after hosting more than 300 attendees to presentations from 48 companies at the same location in 2006. “With Montgomery & Co. as our presenting sponsor this year, our committee, staff and advisory board have worked very hard to secure top-level sponsors and presenters,” Wisenberg said. Sponsors at the 2007 Investor Conference include Acumen BioFin, CIBC World Markets, UBS Investment Bank, Alexandria Real Estate Equities,

Biomed Realty Trust Inc. and California Manufacturing Technology Consulting. Supporting sponsors include BioCentury, California Equity Research, Dow Jones, Porter Novelli Life Sciences and RR Donnelley, while affiliate sponsors include Bank of America, Mentus Life Science and PR Newswire. The format of the conference will be an opening reception on the evening of Oct. 31, and then two full days with 58 company presentations, ending early Friday afternoon. John McCamant, editor of the Medical Technology Stock Letter, San Diego Mayor Jerry Sanders and George Montgomery of Montgomery & Co. will be speakers at the conference. With 20 years of experience editing an influential biotech investment newsletter, McCamant has become one of the most quoted experts in the life science industry. He will talk about Medical Technology Stock Letter’s investment philosophy, using companies from Southern California as examples of what they look for in life science investments. San Diego Mayor Sanders will discuss righting the city’s financial ship, while George Montgomery, managing director of health care banking, will host a panel on current trends in life science financing and investment. More information on the Investor Conference, including the agenda for the conference, is available at www.BIOCOM.org. Accredited investors will be admitted for free. Source Code: 20071018crp