West Coast Biotech Roundup: ARCH, Ebola, ViaCyte, Calithera & More

Xconomy San Francisco — 

Lots of news this week up and down the coast and up and down the biotech food chain. We’ve got a new twist (or fold, if you prefer) on academic Ebola research at the University of Washington, and new workspace for tiny startups in Palo Alto and San Diego. We’ve got fresh venture capital for early-stage companies from ARCH Venture Partners, and more mature companies like Calithera Biosciences looking to go public.

If you prefer your news with a corporate flavor, we’ve got an update on a small San Diego company working in the shadow of the Roche/Intermune acquisition. Just remember, the Left Coast is the Best Coast.

—ARCH Venture Partners, with offices in San Francisco, Seattle and elsewhere, said Wednesday it closed its eighth fund with at least $400 million in commitments, matching its seventh fund that closed in 2007. The total could rise to $425 million. Managing director Bob Nelsen told Xconomy that ARCH VIII will have at least one and perhaps two or three megadeals like Juno Therapeutics, in which ARCH invests an unusually large amount of capital alongside nontraditional early-stage biotech investors.

—The Seattle Times reported this week that scientists at the University of Washington’s Institute for Protein Design are asking gamers worldwide to help with Ebola research. The gist of it: The online site Foldit, which is run by a different group at UW, allows players to tackle an Ebola “puzzle” and find weaknesses in the virus’s structure that might be attacked by a protein therapeutic. Meanwhile, a new effort to test Ebola vaccine kicked off this week; the U.S. National Institutes of Health is launching two trials in healthy volunteers, and a British consortium of public and private health groups plan a similar trial in the U.K., Mali, and the Gambia.

—San Diego-based ViaCyte, which has been developing an artificial pancreas, said it received $20 million from Johnson & Johnson, an existing investor, as part of a rights agreement with J&J’s Janssen Research & Development. The agreement allows Janssen to evaluate ViaCyte’s technology, which consists of pancreatic precursor cells in a proprietary container implanted under the skin. The device allows the encapsulated cells to release insulin into the bloodstream, and does not require drugs to suppress the body’s immune response.

—Calithera Biosciences of South San Francisco filed paperwork Monday declaring its intent to go public. The firm, spun out of the University of California, San Francisco lab of Jim Wells, raised a Series D round in October 2013 that signaled a shift in strategy, from work based on Wells’ research on the role of caspases in cancer cell death to a new oncology program based on glutamine metabolism. The round was led by new investors, including hedge fund Adage Capital Partners, so it’s no surprise that Calithera has moved quickly to go public.

—After months of acquisition rumors, Brisbane, CA-based InterMune accepted an $8.3 billion offer from Roche, the top price so far paid for a biotech working on drugs to treat pulmonary fibrosis, a deadly scarring of the lungs. Intermune is the first to bring a pulmonary fibrosis drug to market. Pirfenidone, which treats the idiopathic version (no known cause), is sold in Europe under the brand name Esbriet. U.S. regulators should decide whether to approve pirfenidone in late November. Roche CEO Severin Schwan told Forbes that InterMune, if shareholders approve the deal, will not be the target of job cuts. “This is a growth story,” Schwan said.

—The Roche-Intermune deal comes at an opportune time for San Diego’s Genoa Pharmaceuticals, which has been raising a Series A round from investors to advance its lead drug candidate into clinical trials. The FDA granted orphan-drug status to Genoa earlier this month for its lead drug candidate, a reformulation of pirfenidone as an aerosol for treating pulmonary fibrosis. Founded in 2011, Genoa raised about $1.1 million in debt financing in 2012, according to a regulatory filing.

—Armetheon of Menlo Park, CA, said Thursday it has raised a $7 million Series A round of funding to help move its oral anticoagulant Tecarfarin into a pivotal trial. AshHill Biomedical Investments and Hercules Bioventures led the round with participation from Atheneos Capital and Impax Laboratories founder Larry Hsu. The company wants to file for marketing approval in 2017.

—The San Diego-based Gary and Mary West Health Investment Fund was a lead investor in a $25 million investment round for San Antonio, TX-based AirStrip, a healthtech company that has integrated its mobile health and IT technology with Qualcomm Life’s 2net wireless platform. Qualcomm (NASDAQ: QCOM) also invested in the round, along with Sequoia Capital, the Wellcome Trust, Hospital Corp of America (NYSE: HCA), Leerink Capital, Dignity Health, and St. Joseph’s Health System. AirStrip CEO Alan Portela, who keeps an office in San Diego, said AirStrip provides software as a service to more than 350 hospitals, and has an additional 200 under contract.

—Hera Therapeutics, a two-year-old startup incubating at the Janssen Innovation Lab in San Diego, has identified a small molecule that appears to prevent several subtypes of the human papillomavirus (HPV) from replicating—including the two subtypes that cause most cases of cervical cancer. Founder Karl Hostetler, a UC San Diego emeritus professor of medicine who has founded several anti-viral startups, said Hera plans to advance the compound as a topical treatment applied to the skin.

—Tech accelerator StartX of Palo Alto, CA and the University of California-affiliated QB3 have jointly opened a 2,000-square-foot biotech lab for startups participating in the StartX Med program. With room for 20 scientists at once, it’s one of several bio-incubators in the Bay Area catering to tiny biotech startups in need of cheap, flexible research space. The lab will also rent space to entrepreneurs not affiliated with the program, most likely those spinning out work from nearby Stanford University.

—More incubator news: Medical product developers John Weis and Paul DiPerna have opened a space for new medical diagnostics technologies and devices as part Foundry Medical Innovations, a Carlsbad, CA-based firm that provides product development services. DiPerna was a founder and the former chief technology officer at San Diego’s Tandem Diabetes Care (NASDAQ: TNDM). Weis was previously general manager of Symbient Product Development.