Exelixis Bags $156M, Tethys Bets on Prevention, UCSF’s Delicate Dance With Industry, & More Bay Area Life Sciences News

Xconomy San Francisco — 

One of the highfliers in Bay Area biotech, which had a lousy 2010, looks like it’s turning into a comeback story in 2011.

—South San Francisco-based Exelixis (NASDAQ: EXEL) scooped up $156 million through a stock offering this week, as investors piled in to get a piece of the action in cabozantinib (XL184). This is the same cancer drug that Bristol-Myers Squibb kicked to the curb last summer, but which now is showing some eye-opening results in patients with prostate cancer. The stock of this company, beaten down below $3 at one point in August, closed yesterday at $11.31. We’ll see how aggressively Exelixis moves ahead in clinical trials of this drug, now that it has socked away that extra dough.

—Jeff Bluestone, the No. 2 official at UC San Francisco, provided his thoughts in an exclusive interview this week about how the institution has approached its latest string of industry partnerships with big companies like Pfizer, Bayer, and Sanofi-Aventis. I’ll have more questions for Bluestone coming up on Wednesday, since he’s one of the featured speakers at Xconomy San Francisco‘s big event on the 20-year outlook for Bay Area life sciences.

—Emeryville, CA-based Tethys Bioscience is starting to make some progress with an idea that’s actually pretty weird in the U.S. healthcare system—it wants to make money by preventing disease, not treating it. CEO Mickey Urdea, a veteran from the early days of Chiron, talked in detail about how Tethys is building a business around diabetes prevention. Urdea will also provide a quick overview of Tethys at the Xconomy event on Wednesday evening at UCSF.

—Here’s one bonus story from Xconomy Seattle that I’m guessing a lot of Bay Area readers won’t want to miss. It’s about how the Bill & Melinda Gates Foundation, the world’s largest philanthropy with over $36 billion in assets, cut through a thicket of legal and financial issues to make its first direct equity investment in a biotech company. Doug Holtzman of the foundation talked about why the foundation chose to make a $10 million equity investment in North Carolina-based Liquidia Technologies, as opposed to doing a more traditional thing, like providing a grant for a very specific program. It’s the sort of thing that could provide an investment template for other global health-related investments by the foundation.

—This week’s edition of the BioBeat column, now a regular Monday feature, focused on the dysfunction in the IPO market. If a company like Berkeley, CA-based Plexxikon can’t get a decent valuation from public investors, then how can less credentialed outfits hope to do any better?

—Lastly, we had a guest editorial from Stewart Lyman about how biotech companies sometimes seek advice for all the wrong reasons. This provides an eloquent explanation for why nobody should care much when a company crows about how it has a Nobel Laureate or two on its scientific advisory board.