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TimmermanReport.com - Your Edge In Biotech
Your Edge in Biotech.
11
Jun
2015

NEA, Polaris Bet $22M on Startup, Xtuit, to Break Down Tumor Microenvironment

Logic would say cancer drugs can’t work if something is keeping them out of the tumor. The latest startup from the Bob Langer/Polaris Partners factory floor just got $22 million to clear out some of the barriers around tumors, and make it easier for some of the exciting new immuno-oncology drugs to do what they do best.

Cambridge, Mass.-based Xtuit Pharmaceuticals, founded in 2011 by Polaris, is announcing today it has pulled in $22 million in Series A financing. NEA led the round, and was joined by Polaris, and new investors CTI Life Sciences, Arcus Ventures and Omega Funds. The scientific founders are Rakesh Jain of Massachusetts General Hospital, Robert Langer of MIT, and Ron Evans of the Salk Institute. Alan Crane of Polaris is the founding CEO.

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8
Jun
2015

Bristol-Myers Should Drop the Bully Act. Non-Competes Are Bad for Biotech

Big Pharma talent has been migrating to biotech startups the past couple years, and that’s good. Lots of people with skills and rare experience are being matched with exciting new opportunities. This dynamic labor market is healthy for the industry, and increases its ability to create innovative healthcare products.

Foolishly, some company had to try to squash all that.

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5
Jun
2015

Cancer is Hot, Diabetes is Not: Watch for Drug Safety and Cost Debates at ADA

The Internet was crackling this week with stories of progress against a disease that kills lots of people, and costs society billions in lost productivity.

That was cancer. Don’t expect such hopeful scientific narratives this weekend, as physicians gather in Boston to discuss another common scourge—diabetes. Compared with innovation in cancer, diabetes is dullsville. This drug market is more about existing big companies in a marketing-driven street brawl. Sales and marketing people will be looking for any little fly in the ointment in competitors’ safety data, in an attempt to hold and take more market share.

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1
Jun
2015

Big Pharma Talent Is Flocking to Biotech Startups. Nobody’s Saying ‘Are You Nuts?’

Look at some of the high-science, high-risk, venture-backed companies in biotech and you’ll see something that wasn’t so common five years ago. The management teams of these startups are often stacked with people who quit high-paid, high-powered jobs in Big Pharma.

Last week, the cancer immunotherapy startup Juno Therapeutics poached a chief scientific officer, Hyam Levitsky, from Roche. Microbiome drugmaker Seres Therapeutics filed for its IPO, showing off a management team full of ex-Merckers. A few days earlier, Pfizer senior vice president Jose-Carlos Gutierrez-Ramos said he left to run a 15-person synthetic biology startup called Synlogic. Earlier, 23andMe lured Genentech’s Richard Scheller to lead its new drug discovery group.

Biotech has always depended on recruiting experienced management talent from big companies, going back to George Rathmann’s recruitment from Abbott Labs to Amgen in 1980. But talent tends to ebb and flow. Most biotech management teams are populated by people from academia, or from other biotech companies. But over the past few years, a number of factors have been driving a full-blown migration from Big Pharma. There’s exciting scientific opportunity in startups, and a bull market showering money on new things. That coincides with R&D layoffs, and re-organizations, that make the organizational atherosclerosis of big companies harder to tolerate.

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29
May
2015

Cancer Immunotherapy’s Amazing Four-Year Run: A Timeline of Events

The biggest idea in cancer R&D, for a couple years, has been the notion that you can unleash the immune system to attack cancer cells like a foreign invader. Immunotherapy, in various permutations, is on everyone’s mind this weekend at the American Society of Clinical Oncology meeting in Chicago.

The buzz is there because of the evidence. Researchers are raising the bar on response rates, treatments are working for multiple tumor types, long-term follow-up reveals long-term remissions, and the side effects are usually tolerable (not always, but most of the time). Scientists now increasingly believe that combinations of immunotherapies with complementary mechanisms will be the key to knocking down tumors and keeping them down. The great hope is that cancer cells won’t be able to resist these drugs the same way they do other treatments.

The barrage of scientific papers, business deals, media attention (and hype) have been overwhelming at times. To provide subscribers a contextual framework for processing the information flow at ASCO, I’ve put together a timeline of major events.

As you can see, there’s no single ‘aha’ moment. The immunotherapy story is more about accumulated momentum. While some get the impression that checkpoint inhibitors and CAR-T immunotherapy are new concepts, they have actually been around for decades. The difference now is that they have matured to the point where the clinical data are strong enough to grab the attention of patients, doctors, business executives, and investors. “It’s completely changed the way we think about oncology,” said Jason Rhodes, a partner with Atlas Venture.

“Look how long the checkpoint inhibitors were flailing around in the clinic and failing,” said Chuck Wilson, the CEO of Unum Therapeutics, a startup cancer immunotherapy company in Cambridge, Mass. “Yervoy took 10 years to make it. People overlook that part of the story. The whole opportunity around checkpoint inhibitors came into focus, following a decade of mostly failure.”

With that important caveat, and the fact that the immune system is unbelievably complicated and we still know little about it, here are some of the key events that have stirred so much optimism.

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26
May
2015

Long-Term Relationships May Not Count in Many Businesses, But They Do in Biotech

Cynicism runs through just about every business, if you read the news or follow pop culture. The Netflix show “House of Cards” portrays dirty politics of Washington, D.C. A new “Entourage” movie delves into Hollywood manipulation. Prosecutors in real life last week showed traders cackling about rigging interest rates that harm millions of people, so they can sail away on their yachts.

Such behavior is regularly rewarded in many industries. An economist might say rational actors looking out for their self-interest will do whatever it takes to maximize their take in interactions with partners, customers, investors. Why worry about long-term consequences if short-term, selfish, or even illegal behavior is rewarded?

Biotech and pharmaceuticals certainly has its shady characters, and shady practices, and always has. I’ve written about a lot of those actions, and will continue to do so. But my experience this year has taught me that there are many people in the industry who still treat others as they’d like to be treated, and who do care about long-term relationships. I’ve noticed it in founding this publication.

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22
May
2015

The Genentech Alumni: Where Are They Now?

Genentech is almost 40 years old, and still has spring in its step. Through ups and downs, the company has never stopped attracting first-rate talent, and still develops people with the itch to do big things in healthcare. Last week, a trio of Genentech veterans came together to start a neuroscience company called Denali Therapeutics that raised initial financing of $217 million.

The influence of Genentech alumni on biotech is hard to overstate. The South San Francisco company has long set the standard for excellence in drug discovery and development, and its work hard/play hard culture has been widely imitated. An industry hub grew up around it. While many people think “20 percent time” was Google’s brainchild, Genentech was giving its scientists freedom to pursue quirky projects years earlier, and it helped provide a spark for the hit cancer drug Avastin. Six years after a takeover, Genentech remains the leading cancer drug developer in the world.

Genentech has been so good, so big, for so long, and across so many functions that it’s only natural its thousands of alumni have migrated all over the industry to find new opportunities to make their mark. Today, Genentech has 14,000 employees (about 2,000 more than a couple years ago). Even at that size, every so often, it spins out people ready for startups like Denali. The culture is so strong that every year, a group of several hundred “GenenExers” reunite at the JP Morgan Healthcare Conference in San Francisco. Many of them even seem to like each other.

“When I think of biotech and winning cultures and winning teams, I always, always think of Genentech at the top of the list,” said John Maraganore, CEO of Alnylam Pharmaceuticals. “If I see the name ‘Genentech’ on a resume, my interest level perks up by many percentage points.”

“It’s hard to point to a company in our industry that has done more things right, across their whole business,” said Jeff Jonker, president of South San Francisco-based NGM Biopharmaceuticals, and a veteran of Genentech from 2003-2009. “They hire good talent, invest in developing people and generally impress many good habits…We are hiring extensively right now, and are definitely targeting current and former Genentech researchers because they represent some of the finest scientists in the world.”

This week, I tracked down as many Genentech alumni as possible, going all the way back to the founding days, to see what they are doing now. It’s been an eye-opening experience. The list includes 577 people at last count. (Subscribers can read on to see the list, complete with contact links).

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21
May
2015

Why a Pfizer R&D Exec Joined Synlogic to Make ‘Therapeutic Synthetic Life’

One of Pfizer’s well-connected R&D leaders, Jose-Carlos Gutierrez-Ramos, quit recently to run a startup with technology that’s just a little too early, a little too risky, for just about any Big Pharma company.

JC, as he is commonly known, said today he has joined Cambridge, Mass.-based Synlogic as president and CEO. It’s a two-year-old company with $35 million in venture capital from NEA, Atlas Venture, and the Bill & Melinda Gates Foundation.

The idea sounds wild even in a time when daring new therapeutic platforms like gene therapy and RNA therapy are ascendant. Synlogic seeks to make “therapeutic synthetic life.” What does that mean? Simply, it’s about taking live microbes (bacteria or viruses) and programming them with specific genetic codes, like a computer with software.

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18
May
2015

Zigging Away From the Herd: Lilly’s Road-Less-Traveled R&D Strategy

In my hometown, an insurance company ad campaign pokes fun at locals who commit the fashion faux pas of wearing socks with sandals. We’re all in on the joke. We like living in a place where it’s OK to be quirky and geeky. There’s relatively little pressure to conform.

Researchers, too, tend to be an iconoclastic bunch. If they were great at fitting in, they probably wouldn’t be crazy enough to come up with groundbreaking ideas.

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15
May
2015

More than Moderna: Who’s Who in mRNA Therapeutics?

Biotech doesn’t usually make for must-see TV. It scares most people. Something must be up if a biotech company can get extended air time on television.

Cambridge, Mass.-based Moderna Therapeutics captured more than its share of attention this week when it succeeded Elon Musk’s Mars exploration company as the “No. 1 Disruptor” in corporate America by CNBC. Many in biotech could only scratch their heads in wonder. For starters, it’s not the only company in mRNA therapeutics. (Subscribers can read on for a full list of 21 companies playing active roles in the field.)

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14
May
2015

Baseball, Regression to the Mean, and Avoiding Potential Clinical Trial Biases

It’s baseball season. Which means it’s fantasy baseball season. Which means I have to keep reminding myself that, even though it’s already been a month and a half, that’s still a pretty short time in the long rhythm of the season and every performance has to be viewed with skepticism. Ryan Zimmerman sporting a 0.293 On Base Percentage (OBP)? He’s not likely to end up there. On the other hand, Jake Odorizzi with an Earned Run Average (ERA) less than 2.10? He’s good, but not that good. I try to avoid making trades in the first few months (although with several players on my team on the Disabled List, I may have to break my own rule) because I know that in small samples, big fluctuations in statistical performance in the end  are not really telling us much about actual player talent.

One of the big lessons I’ve learned from following baseball and the revolution in sports analytics is that one of the most powerful forces in player performance is regression to the mean. This is the tendency for most outliers, over the course of repeated measurements, to move toward the mean of both individual and population-wide performance levels. There’s nothing magical, just simple statistical truth.

And as I lift my head up from ESPN sports and look around, I’ve started to wonder if regression to the mean might be affecting another interest of mine, and not for the better. I wonder if a lack of understanding of regression to the mean might be a problem in our search for ways to reach better health.

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11
May
2015

How Do VCs Divvy Up Their Pay?

Venture capitalists are notorious for keeping their performance a secret. But an even bigger mystery is who has the power inside firms, and how that gets reflected in their pay. Compensation is a sign of who’s who inside a firm, and what it values. It’s frequently the thing that tears apart firms in both bad times and good.

While much scrutiny is focused on whether VCs are overpaid underperformers (see the Kauffman Foundation’s blistering 2012 report), most critiques say little about how the loot gets divvied up in-house. Turns out this subject has been of keen interest among limited partners—the pensions and endowments and foundations who bankroll VCs—for several years. Prying minds there want to know whether a firm they back has staying power, or is likely to shed junior partners and/or implode. The subject takes on added significance in boom times, when partners sometimes look at their own glittering results and ask, ‘Why am I making the same as that guy who doesn’t do much?’

Obviously anybody lucky enough to get a VC job is richer than the average working stiff and has little to complain about. They make a lot off management fees in lean years, and get rich from their stock in a boom. But I had never given VC compensation structures much thought until it came up in a recent talk with Bruce Booth about the new Atlas Venture fund.

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7
May
2015

Gates Foundation VC Portfolio: Where is the Global Health Investment Going?

The Bill & Melinda Gates Foundation, the world’s largest philanthropy, decided about five years ago that instead of just giving out grants to researchers and hoping for the best, it sometimes made more sense to invest in startups.

That way, the Seattle-based foundation could put some of its $43.5 billion to work with entrepreneurs developing high-impact vaccines, diagnostics, and drugs for neglected diseases. Given Bill’s history at Microsoft, he knows how entrepreneurs can bring concentrated energy to get things done in ways that academics and big companies can’t. (For a list of 13 companies the Gates Foundation has invested in, subscribers can read on.)

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4
May
2015

What’s Real, and What’s Not Yet, in Digital Health?

The late, great columnist Molly Ivins once said there are three ways to evaluate a politician.

First, look at the record.

Second, look at the record.

Third, look at the record.

Notice the lack of emphasis on what the politician says. Actions speak. Digital health, for some time, has been one of those areas long on talk and short on action. There are many good ideas and smart entrepreneurs. Healthcare and drug development have so many inefficiencies that the opportunities for improvement are practically endless. But digital health entrepreneurs sometimes sound pretty naïve about how slow healthcare systems and drugmakers are to change. The results have been pretty underwhelming. Still, some interesting actions have occurred in the last 12 months.

Here are a few that stand out.

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29
Apr
2015

Q&A With Illumina CEO Jay Flatley on Where Genomics Is Growing

Walk into any biomedical lab these days, and chances are you’ll see Illumina’s orange logo. Many scientists, diagnostics makers, physicians, and Wall Street analysts look upon the dominant maker of DNA sequencing machines with a mix of respect, fear, and awe. Much like Intel became the company that sparked so much of the computer revolution, Illumina has risen to prominence as a driver of the genomics revolution.

The San Diego-based company makes the workhorse machines that sequence genomes—the full set of genetic instructions for making bacteria, plants, animals, and humans. As researchers race to develop DNA-based technologies that detect genetic abnormalities in developing fetuses, variations that drive tumors, and much more, the disciplined market leader in sequencing shows no signs of letting up.

The company predicted a year ago that the total addressable market for sequencing will skyrocket almost 10-fold to $20 billion. Now it says that number was too small. Analysts see essentially nothing and nobody getting in the way. A Goldman Sachs analyst predicted a year ago that Illumina would capture 75 percent of the booming sequencing market all the way out to 2020. “We continue to see ILMN as a best-in-class growth story that is well positioned for multiple additional years of double-digit growth ahead,” said Vamil Divan, an analyst at Credit Suisse, in a recent note.

I spoke with Illumina CEO Jay Flatley last week in a wide-ranging interview about the future of genomics, how the company maintains its edge, and the challenges he sees ahead. (Subscribers can read on)

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27
Apr
2015

It’s Time to Re-Think How We Train and Develop Biomedical Scientists

A strange feeling hit me the other day at one of the world’s great biomedical research centers. There I was, at the end of a long table at MIT, surrounded by two dozen young researchers. While munching sandwiches over the lunch hour, they fired away with questions about the biotech industry.

It was a great back-and-forth. The questions were sharp and earnest. But something bugged me. At times, it felt like they were interviewing a foreign correspondent back from some exotic locale.

That didn’t seem right. How can a room full of this much potential be so barricaded away from the industry? Shouldn’t I be interviewing them, because they are so close to the front lines of progress? Why exactly, are they so distant from the business activity within walking distance? Industry, after all, needs them. And these people need jobs.

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23
Apr
2015

See the Photos: Timmerman Report East Coast Launch Party

About nine months ago, I booked plane tickets for the whole family to go to Boston. The plan was to run the Boston Marathon, and maybe do a little sight-seeing.

I didn’t realize at the time it would turn into a business trip. Oh, but it did, and what a great business-and-pleasure trip it was.

After Timmerman Report went live on Feb. 2, I figured it would make sense to have a launch party for subscribers in Boston while in town for the marathon. The party was a smash hit. It drew a diversified group of about 125 people from around the Boston biotech hub. There were CEOs, venture capitalists, heads of R&D and business development, finance people, communications people, postdocs, journalists and scientists. The audience was a close reflection of the reader demographics taking shape at this new subscription publication.

Special thanks go out to Pfizer for graciously hosting this reception at its new building at 610 Main Street in Cambridge. Thanks as well to Kayana Szymczak, who took all the photos. You can click on the thumbnail images below for a larger view.

Thanks to all of you who have subscribed, plan to subscribe, contributed a story tip, or passed along an encouraging word. This has been a wonderful experience. If the TR were a marathon, I’ve just barely crossed the starting line in Hopkinton.

20
Apr
2015

Hungry for Cash, Academia Reaches For a Bigger Piece of Biotech Action

Cash is gushing through the pharmaceutical industry at the same time its allies in academia are scraping for every nickel. The gap between these haves and have-nots is wide and getting wider. But at least in a couple recent cases, the poor people in academia have figured out clever ways to get a piece of the biotech action, at least when they deserve it.

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16
Apr
2015

AACR Conference Preview: Five Themes To Watch In Immunotherapy

This coming weekend is the annual American Association of Cancer Research (AACR) meeting in Philadelphia. This conference is known as a showcase for research in its early, exploratory stages, and occasionally as the place where late-stage, practice-changing clinical trial data get presented. I wanted to offer a preview of what to expect. Once again, immunotherapy promises to be a major focus of the meeting, with dozens of presentations and poster sessions devoted to the rapid progress being made in the field. I have my eyes on five major topics:

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15
Apr
2015

Who Should Biotech Pros Follow on Twitter?

Many people in biotech are still afraid of Twitter, even as it has accumulated more than 280 million users. Drug companies want to advertise to patients and doctors on social media, but they’re afraid the FDA will slap them for misleading promotions. They want to engage with investors, but they’re afraid someone (rightly or wrongly) will question their clinical trial data, or drug side effects, and make them look bad.

The answer, for many companies, has been to set up a token corporate account to keep the squatters away and then maybe have a junior employee do some monitoring and cursory outreach. Most of those company accounts have little to say, and are safe to ignore. (Subscribers can read on for a detailed list of 75 executives, physicians, scientists and journalists who are worth following).

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