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West Coast Biotech Roundup: Otonomy, Oncothyreon, Gilead, & More

Xconomy San Diego — 

Life sciences news pummeled the West Coast last week like a series of storms barreling out of the North Pacific. Here’s our roundup:

—Otonomy (NASDAQ OTIC), a San Diego biotech developing new treatments for diseases and disorders of the ear, said Friday the FDA approved its antibiotic gel for treating ear infections among children. It’s the company’s first drug to win FDA approval. Otonomy’s ciprofloxacin otic suspension (Otiprio) was approved as a single-dose, physician-administered treatment among children undergoing tympanostomy tube placement.

—Oncothyreon (NASDAQ: ONTY), a Seattle microcap developing new cancer therapeutics, got a lesson in writing clearly last week, after releasing results from ongoing trials of its drug for treating HER2-positive metastatic breast cancer. Oncothyreon’s share price fell over 25 percent as analysts struggled to understand what was described as a “muddled press release” and “confusing data.” Oncothyeron’s stock was trading around $3.13 a share before the announcement and around $2.35 at the end of week.

Cerberus Capital Management invested $105 million for a majority stake in Redwood City, CA-based PaxVax, a specialty vaccine company focused on infectious diseases. The deal enables PaxVax to eliminate debt, and allows the company to grow its business for Vivotif, an FDA-approved typhoid vaccine licensed in 27 countries, and to launch Vaxchora, its vaccine for cholera. Cerberus plans to retain the PaxVax management team and says it supports the company’s R&D strategy and commitment to expanding access to vaccines in the developing world.

—Laguna Pharmaceuticals, which relocated to San Diego from Cleveland, OH, in February with $30 million in new venture funding, shut down after safety concerns emerged in a Phase 3 clinical trial for its drug, intended to treat atrial fibrillation. The drug—a 1,4-dialkylpiperazine derivative (Vanoxerine)—was the only drug Laguna had under development.

—The La Jolla Institute for Allergy and Immunology and San Diego’s HardTech Labs have formed a joint venture called HTL Life to operate a accelerator program for healthtech startups developing next-generation technologies in human health and well being. The institute is providing space for as many as 15 startups. HTL Life plans to provide as much as $250,000 in seed funding to each company admitted to the accelerator.

—Gilead’s  (NASDAQ: GILD) chief scientist told the Financial Times that the Foster City, CA-based biotech is on the hunt for acquisitions while it goes prospecting for a drug as successful as its hepatitis C drug. Norbert Bischofberger, Gilead’s executive vice president of research and development, said the pharma is looking particularly for target companies that have drugs that are already proven to work in early-stage trials.

—Pfizer and BioAtla, based in San Diego and Beijing, have agreed to work together to develop and market new antibody therapies based on Pfizer’s antibody-drug conjugate payloads and BioAtla’s conditionally active biologics technology. Under their licensing agreement, Pfizer gets an exclusive option to commercialize BioAtla CAB antibodies targeting CTLA4, a validated immuno-oncology target in humans. BioAtla could earn as much as $1 billion under terms of the deal.

—Novato, CA-based Raptor Pharmaceuticals (NASDAQ: RPTP) said Thursday it plans to push ahead in a pivotal study of its drug for Huntington’s Disease, even though results from a Phase 2/3 trial had no statistical significance. Raptor said the results were clinically meaningful because they showed patients who got the Raptor drug RP103 for a full 36 months experienced a 25 percent slower progression in the degeneration of their motor skills, compared with patients who delayed starting treatment with RP103 for 18 months. The company noted there is no currently approved drug that slows the progression of Huntington’s Disease.

—San Diego-based Enlibrium raised $15 million in a Series A financing co-led by Avalon Ventures and TPG Biotech to advance the diabetes drug metformin as a potential new anti-cancer drug. The financing is expected to provide enough capital to advance Enlibrium’s lead compounds through Phase 1 clinical trials.

—GreatCall, a San Diego mobile virtual network operator targeting the 65+ market, acquired the assets of Lively, a not-so-lively San Francisco startup with technology and services to help older adults live independently. A spokesperson told MobiHealthNews that no Lively employees would be migrating to GreatCall because no Lively employees remained when due diligence for the acquisition began. Financial terms of the asset sale were not disclosed.

—Prosetta Biosciences, a San Francisco biotech developing treatments for humans and animals, said it raised about $31 million in gross proceeds in a Series D financing described as a private stock placement. Net proceeds will be used primarily for R&D as Prosetta advances its “assembly machine” approach to drug discovery for treating central nervous system diseases and disorders, and for working capital and general corporate purposes.

—True North Therapeutics, a South San Francisco biotech developing new drugs for treating rare diseases, said it has completed a $40 million Series C financing. Proceeds from the financing will be used to advance the clinical development of its compound for Cold Agglutinin Disease and other rare diseases. New Leaf Venture Partners led the round, which included new investors Perceptive Advisors and Cowen Private Investments, and existing investors Kleiner Perkins Caufield & Byers, MPM Capital, OrbiMed, SR One, and Baxalta Ventures.

—San Diego’s MD Revolution, a concierge medical business developing new ways to manage patients’ health, said it has raised $23 million in a financing round co-led by Chicago’s Jump Capital and an unnamed global healthcare technology company. MD Revolution said it has begun serving over 100 medical practices since February, when the company enrolled the first customers in its chronic care management program.

—San Francisco-based Arterys, which provides a Web-based platform that integrates cloud computing and machine learning to analyze time-lapse MRI heart imaging, agreed to a partnership with GE Healthcare, which is including the Arterys System in new GE Healthcare MRI machines. Arterys also closed on $7 million in a Series A financing round led by Emergent Medical Partners. Norwich Ventures, AME Cloud Ventures, Morado Ventures and Asset Management Ventures also participated.

—A new collaborative program between Menlo Park, CA-based SRI Biosciences, a division of SRI International, and physician-researchers from Stanford Cancer Institute (SCI) is working to identify new compounds to treat multiple forms of cancer and other conditions. In a joint statement, the partners said the SRI-Biosciences-Stanford Drug Discovery and Development Program was created in response to a significant drop in the early pipeline of innovative new drugs.