The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monthly Archives: November 2010

Monday Biotech Deal Review: November 29, 2010



Welcome to your Monday Biotech Deal Review.  I hope our American readers had a very happy thanksgiving weekend, but hopefully there’s still some room left for your weekly digest of biotech deals.  This week witnessed the closing of the US$52M IMRIS financing [Ed. -- as well as a rafter of other deals].  Read on to learn more about these and other deals from the previous week.  Read more of this post

This Week in the Twitterverse

Here’s your dose of weekly biotech news, all wrapped up in one weekend-friendly package thanks to our Twitter stream @crossborderbio:

 

Friday Science Review: November 26, 2010

Ivermectin Nails Neurotransmission in Brugia malayi

McGill University

Published in PNAS, November 16, 2010

Well over 100 million people are currently infected with Brugia malayi, a microscopic nematode that causes lymphatic filariasis. Infection can eventually lead to the chronic inflammatory disease known as elephantiasis. In an effort to better understand this parasitic creature Dr. Timothy Geary and his team in the Institute of Parasitology at McGill University took a closer look at its glutamate-gated chloride channels (GluCls). These channels are localized to a very specific muscle structure surrounding an excretory vesicle in B. malayi and are essential for controlling protein release. Researchers show that ivermectin, a broad-spectrum anti-parasitic medication commonly deployed to reduce B. malayi infection, directly interferes with GluCl function preventing excretion of proteins from this excretory site. As protein excretion is known to be a very important aspect of the parasites survival system, allowing it to evade the immune system of the host it colonizes, researchers attribute the effectiveness of ivermectin to its ability to interfere with neurotransmission at GluCls. Screening for additional compounds that interact with GuCls could provide new treatment paradigms for B. malayi infection in the future.

Prion Disease: A Sticky Situation

University of Toronto ♦ University of British Columbia

Published in PNAS, November 16, 2010

Prion diseases include the infamous mad-cow disease (bovine spongiform encephalopathy), fatal familial insomnia, and the human disease ‘kuru’. The latter of these, believe it or not, being caused by human cannibalism and documented in small tribes located in Papua New Guinea that partake in strange funeral rituals following the deaths of relatives (I’ll spare you the details). These neurodegenerative diseases are often terminal and are caused by proteins, known as a prions, that have a propensity to aggregate together forming dangerous plaques that ultimately destroy neural tissue. Not all prion proteins are bad however, their behaviour depends on structural state. A switch from the α-helical conformation to the pathological β-form leads to rogue prion proteins that ‘stick’ to one another. Researchers at the University of Toronto were curious as to why animals of different sizes have different susceptibilities to prion diseases. In this study led by Dr. Avijit Chakrabartty, scientists used X-ray crystallographic structure analysis and a rabbit model to identify cellular mechanisms that explain the rabbit’s relative immunity to prion diseases. A helix-capping motif found in rabbits prevents folding of prion proteins into the pathological state. Findings like these, elucidating the underlying mechanisms driving transformation to the pathological state, should help us brainstorm future therapies for these deadly diseases.

Regenerative Medicine Takes Off: En Route to Reality?

A month or so after Geron Corp. initiated the world’s first embryonic stem cell-based clinical trial, UK-based ReNeuron has announced that it has treated its first stroke patient with expanded populations of neural stem cells at the Institute of Neurological Sciences, Southern General Hospital, in Glasgow. The PISCES (Pilot Investigation of Stem Cells in Stroke) study is the first stem cell-based clinical trial to be given the go-ahead by the UK government. ReNeuron’s phase 1 study of ReN001 will involve transplanting neural stem cells into the brains of patients that have been left disabled by stroke. Assessing the safety of the implantation technique will be top priority in the study, however ReNeuron hopes to collect at least some preliminary efficacy data. Patients will be watched closely for two years following surgery, after which a longer-term monitoring process will begin. Contingent on a positive safety review of the first patient in December, a larger cohort of patients will be treated shortly thereafter. Keith Muir, the principal investigator overlooking the trial said:

“We are pleased that the first patient in the PISCES trial has undergone surgery successfully. Stroke is a common and serious condition that leaves a large number of people with significant disability. In this trial, we are seeking to establish the safety and feasibility of stem cell implantation, which will require careful follow-up of the patients who take part. We hope that in future it will lead on to larger studies to determine the effects of stem cells on the disabilities that result from stroke.”

There are three typical treatment modalities for stroke: prevention, acute-phase stroke treatment, and post-stroke rehabilitation. It is the final of these that ReNeuron aims to provide with ReN001 treatment. Contrary to Geron’s oligodendrocyte progenitors being used to treat spinal cord injury, ReNeuron’s ReN001 therapeutic cells are generated from adult sources. Neural stem cells are selected from human tissue samples and expanded in vitro under cGMP manufacturing standards. ReNeuron has also developed quality control measures to select cells that have the proper phenotype, the ability to expand rapidly, and a propensity to engraft well with little immune rejection.

On our side of the ocean California-based StemCells Inc. has filed for Swiss regulatory approval to begin testing its neural stem cells in patients with non-acute spinal cord injury. This contrasts Geron’s approach in its ongoing study which is directed at acute-phase injury. A comparison of these clinical approaches down the line should yield useful information as to when stem cell-based biological intervention is most helpful to patients with spinal cord injury. Massachusetts-based Advanced Cell Technology (ACT) has also announced FDA approval of the world’s second embryonic stem cell-based clinical trial in patients suffering from Stargardt’s Macular Degeneration. The disease, characterized by degeneration of the retinal pigment epithelium, manifests itself early on in life. Twelve patients are expected to participate in the study where retinal pigment epithelial (RPE) cells derived from embryonic stem cells will be transplanted into the  eye. The FDA has granted ACT’s RPE cells orphan status. As a result, the technology will be eligible for accelerated FDA approval and ACT may receive grant money from the government to fund clinical trials.

UK Invests £200M In Technology Innovation Centres, Goes with Fraunhofer Model

Prime Minister David Cameron recently made an announcement outlining the UK government’s plan to allocate £200M for the development of a series of technology innovation centres. They will be designed around the Fraunhofer model implemented in Germany with the vision of creating a multitude of specialized incubators each with a unique technological interest. The announcement comes after an address made by former UK business secretary Peter Mandelson to the Work Foundation earlier this year. In this address Mandelson made it clear that deficit reduction would not only require spending cuts, but would necessitate new modes of spurring economic growth. A top priority was a comprehensive evaluation of technology innovation in the UK. Mandelson pointed out that a “basic skeleton of an industrial innovation system” had been established in the UK, but it would need to be bulked up to increase competitiveness on the international stage and further encourage external collaboration with UK health research centres. Mandelson stated:

“Our challenge now is to build and consolidate that innovation landscape into something like the Fraunhofer network in Germany which actively connects industry and the German research base. With this objective in mind I have asked technology entrepreneur Hermann Hauser to undertake an urgent but systematic evaluation of the UK’s existing innovation network to see how Britain can best emulate the outcomes of the Fraunhofer model.”

Hermann Hauser founded the tech company Acorn Computers (broken into several operations in 1998) and is a partner with the venture capital firm Amadeus Capital Partners. It was Hauser’s recommendation to Mandelson to establish intermediate technology innovation centers in the UK similar to those in Germany. The Fraunhofer-Gesellschaft was founded after the Second World War to bring industry and research in Germany closer together to drive economic growth. Institutions within the Fraunhofer network have traditionally focused on the applied sciences but have also incorporated basic sciences into their agenda, including many areas of biology. There are well over 60 centres in Germany and seven in the United States (Fraunhofer USA) with a diversity of specializations spanning everything from manufacturing technology and advanced materials to marine biotechnology and experimental medicine.

The proposed institutions, tentatively being branded as Clerk Maxwell Centres, will encourage intensive collaboration between academia, industry, and the National Health Service (NHS), and act as translational channels to bring university-level innovations through to market. They will also act as staging grounds for start-ups providing access to equipment, lab space, and supportive expertise that would otherwise be prohibitively expensive to obtain. Another key responsibility will be disseminating information related to funding sources to ensure that industry is aware of all its options in trying to secure funding for early development.

In many ways the centres will be to the UK what MaRS Innovation is to Toronto – with a fundamental mandate of nurturing early stage innovations and guiding them forward to commercial exploitation. The primary differences, of course, being the subdivision of technological interests and national scope in the case of the Fraunhofer model. Hauser foresees a small handful of centres being developed at first, each costing in the vicinity of £50M – £100M over 10 years, and proposes that the UK leverages strengths it already has. Given the depth of stem cell research underway in Britain, an obvious choice for the first Clerk Maxwell Centre is regenerative medicine. As Hauser put it:

“It’s obvious that something exciting is happening in regenerative medicine; we produce more quality stem-cell papers than anywhere else in the world and it has the potential to completely restructure the pharma industry.”

One-third of funding for Clerk Maxwell Centres will come from industry, so the focus of these institutions will have to align with industry interests. Additional funding will come from government and be dispersed over the coming four years. A Technology Strategy Board will then decide how to stream the funds into businesses and research projects at each centre. With each Clerk Maxwell Centre focusing exclusively on one (bio)technological area, companies in industry will have the opportunity to associate with institutions that are more closely tailored to their requirements than would be a general technology hub. By the nature of the model, research and industry will be united, accelerating the commercialization process in select technological areas.

In a similar initiative designed to foster public-private relationships, the UK government plans to support a “UK Life Sciences Super Cluster” with the introduction of a Therapeutic Capability Clusters program. In July of 2009 the UK government published the Life Sciences Blueprint, an expansive document outlining a novel approach to collaboration in the life sciences industry. The integrated approach outlined in the blueprint is expected to generate the critical mass required to develop new therapeutics and “support economic growth and strong healthcare delivery”. It was from this overarching plan that the therapeutic clusters program was born.

Like the new technology centres, each therapeutic cluster in the program will have a discrete specialization. They will be composed of centres of excellence with complementary capabilities, enabling technologies, and commercial goals. Importantly, the formation of clusters will provide a single point of contact for industry through collective organization of cluster activities at one interface. The first two pilot projects, announced by UK Science Minister David Willetts on October 25th (follow link to his speech), will be a cluster for inflammatory respiratory diseases, and another for joint and related inflammatory diseases. Initially, the focus will be on translational medicine, particularly early stage clinical trials where industry has historically had strong interest in collaborating with academia. The fate of the program will be dependent on the success of these initial projects, but if they are successful, and the UK government decides to give the greenlight, it could be the world’s first large scale effort to set up clusters of this nature.

The UK’s drive for self-improvement is impressive. At the end of the day the described technology innovation centres and therapeutic capability clusters come down to public-private relationship building and a trend towards full integration to support commercialization and economic growth. With the proper execution and allocation of funds, these initiatives have the potential to profoundly impact innovation in the UK and reaffirm Britain’s role as a fierce competitor in life sciences innovation.

Monday Biotech Deal Review: November 22, 2010

Welcome to your Monday Deal Review.  There was quite a bit of Canada / U.S. crossborder investment activity last week, with a $700M note offering by Valeant, IMRIS’ USD$52M public offering, and both IMRIS and Tekmira announcing their listing on the NASDAQ.   Read on to learn more, as well as the usual summaries of recent biotech activity. Read more of this post

This Week in the Twitterverse

Here’s your dose of weekly biotech news, all wrapped up in one weekend-friendly package thanks to our Twitter stream @crossborderbio:

 

Friday Science Review: November 19, 2010

Mobile Phones Increase Patient Adherence in HIV Clinical Study

University of Nairobi ♦ University of Manitoba ♦ University of British Columbia

Published in Lancet, November 9, 2010

Researchers recently demonstrated the effectiveness of mobile phones as a tool to bolster patient adherence to an HIV treatment regime. Better adherence to treatment reduced HIV-1 RNA load and may improve patient outcome. Patients receiving anti-retroviral therapy (ART) in Kenya were placed into one of two treatment groups. Both treatment groups received ART but only one received SMS support from healthcare workers. Clinicians sent weekly reminders to patients in the SMS intervention group, upon which they had to reply to confirm adherence within 48h. Adherence to therapy was observed in 168 of 273 patients in the SMS intervention group, and 132 of 265 in the control group, confirming that communication between healthcare workers and patients increased adherence. Suppressed viral loads were documented in 156 of 273 and 128 of 265 patients in the SMS intervention and control groups respectively, providing clear evidence that mobile phone reminders can improve outcome in patients receiving ART. Mobile phone usage is expected to be a useful mechanism to promote ART adherence in resource limiting environments, such as Africa, and is also an important measure for program cost containment. UNAIDS, the Joint United Nations Program on HIV/AIDS, is supporting the use of mobile technologies for future AIDS response.

A Molecular Circuit of Congenital Heart Disease Revealed

University of Ottawa ♦ University of Montreal

Published in PNAS, November 9, 2010

Congenital heart disease (CHD) is the primary (non-infectious) cause of death in infants within the first year of life. The incidence of CHD is now estimated to be a shocking 5% of live births, with less severe undiagnosed cases leading to increased risk of mortality, stroke, and ischemic heart disease. By elucidating a pathway contributing to congenital heart defects, researchers are now closer to grasping the causes of these developmental mishaps. Normal heart development requires differentiation, proliferation, and communication between two adjacent layers of tissue composed of endocardial and myocardial cells. The transcription factors Tbx5 and GATA4 are key players in this process, ensuring that correct myocardial patterning and chamber specification occur. In this study led by Dr. Mona Nemer of the University of Ottawa, researchers implicate Tbx5 in normal heart development by showing that its deletion in mice causes severe atrial defects. After going on the hunt for modifiers of Tbx5 they later identified the gene Nos3. Interestingly, Nos3 is known to be regulated by several factors that increase risk of congenital heart disease including stress and diabetes. These findings illustrate a direct link between environmental cues and the development of atrial defects.

Cisplatin and ING4-carrying Adenovirus Elicit Synergistic Anticancer Activity

Soochow University ♦ University of Saskatchewan

Published in Cell Gene Therapy (npg), November 5, 2010

Combinatorial approaches to the treatment of cancer have been of great interest to the scientific and medical communities as they provide a means to sensitize cancer cells to small molecule drugs. The combination of sensitizing agents and conventional chemotherapeutics has been shown to reduce tumour size more rapidly, prevent cancer cell resistance, and reduce side effects by lowering the dose of cytotoxic small molecule drugs required for therapy. In a joint study between Soochow University, China; and the University of Saskatchewan, researchers have shown that the adenoviral delivery of the tumour supressor ING4 (Ad-ING4) along with cisplatin induces synergistic growth inhibition and apoptosis in a hepatocarcinoma cell line both in vitro and in vivo. In this study researchers reported the upregulation of several protein markers associated with apoptosis and down regulation of the oncogene Bcl-2 in the presence of the Ad-ING4 vector and cisplatin. Importantly, the combination of these agents did not elicit overlapping toxicities in in vivo normal liver tissues of mice suggesting that it could have potential as a future treatment for hepatocarcinoma.

Biotech in the Provinces: OBEST Launches Regional Meetings in Ontario; Western Canada Innovation Agreement to Provide Seed Funding

The Ontario Bioscience Economic Strategy Team (OBEST)* is holding regional cluster meetings starting today that will be chaired by bioscience CEOs from across the province. OBEST launched its evergreen strategy to sustain and grow the province’s health-science industry last week with a meeting of the OBEST advisory committee, which is chaired by Dr. Daniel Billen from Amgen Canada, and includes C-level representatives from business, patient groups, government, academia, ag-biotech and Ontario’s biotech companies.

Innovative ideas are being sought from everyone with a stake in the industry via the regional cluster meetings, which will inform the Advisory Committee’s work.

Meanwhile, out West, the Centre for Drug Research and Development, together with the Provinces of British Columbia and Alberta, and Johnson & Johnson Corporate Office of Science and Technologywill administer a fund supporting innovative health research programs, called the Western Canada Innovation Agreement.  The seed funding will enable early-stage discoveries to achieve commercialization in the life sciences sector.  For more information, visit www.jnjcosat.com/cosat.

* OBEST is an initiative of OBIO, where I am the corporate secretary.

New Firm, New Contributors Contribute to New Look

This morning Ogilvy Renault (my law firm) announced a planned merger with UK-based Norton Rose that will give us fantastic international capabilities, including a new global life sciences focus highlighting our Canadian strength. In addition to being a ground-breaking move for a Canadian firm, it is also exciting for the blog, where reporting has always aimed for an international perspective. Check out the “Shifting IP Constituencies” page or our other industry trends, and you’ll see a wealth of stories emphasizing the global nature of the industry.

So, although the Canadian focus will continue here — in particular with the Monday Biotech Deal Review and the Friday Science Review — we’re bidding the U.S. and Canadian flag logo adieu, and going to a cleaner, more information-packed layout.

A second advantage to the new look is that with a number of contributors active lately, including Jacob Cawker, Mark Curtis and Wayne Schnarr, the author’s name will now appear at the top of each post to give them the full credit they deserve.

More highlights of the new layout include news on the right that’s updated several times a day, plus top posts and trends on the left.

Monday Biotech Deal Review: November 15, 2010

Welcome to the Monday Biotech Deal Review for November 15, 2010.  Read on to learn about IMRIS’ proposed U.S. IPO, a mysterious merger in the making, and heart lasers (and how much they go for), together with your usual assortment of private placements, announcements and other biotech news.  Read more of this post

This Week in the Twitterverse

Here’s your dose of weekly biotech news, all wrapped up in one weekend-friendly package thanks to our Twitter stream @crossborderbio:

Friday Science Review: November 12, 2010

Although I already commented on the stem cell discovery that came out of McMaster earlier this week, I felt that a more detailed look at the methods section would be needed to do justice to the science. After all, the true value of this discovery is in the protocol utilized to make it.

On Fibroblasts and Blood: Just to recap, Dr. Mick Bhatia and his colleagues at McMaster University published findings in Nature earlier this week explaining how they have managed to convert human skin cells to various cellular components of blood. In order to do this they first cultured human fibroblasts in a regular mix of cell culture media atop a thin layer of extracellular matrix protein known as matrigel. By supplementing the media with two growth factors essential for early hematopoiesis, FLT3LG (FMS-like tyrosine kinase 3 Ligand) and SCF (stem cell factor), and transfecting the cells with a lentivirus carrying the stem cell gene OCT4, they were able to stimulate formation of a multipotent hematopoietic progenitor expressing the lineage marker CD45+. This cell type could then be coerced into different blood cells with the addition of a few more hematopoietic cytokines; after which Dr. Bhatia observed the formation of three distinct cell types – monocytes, granulocytes, and myeloid cells, all expressing unique lineage markers. Amazingly, the monocytes could be grown in the presence of M-CSF (macrophage-colony stimulating factor) and IL-4 (interleukin-4) to produce macrophages that actually engulfed FITC-labelled beads. To produce red blood cells, EPO (erythropoietin) had to be added during the initial step of the protocol along with FLT3LG and SCF, upon which enucleated red blood cell-like cells emerged expressing the erythroblast marker CD71. The next step is figuring out how a single efficient differentiation protocol can produce the full spectrum of blood components in one shot, which will be a challenge, but one I’m sure the team at McMaster’s Stem Cell and Cancer Research Institute are up to.

Bacterial Immune System: Some bacteria have their own micro-immune system in the form of the CRISPR/Cas locus. After bacteria are infected with viruses this immune locus takes up small pieces of viral DNA known as ‘spacer’ DNA. These provide a mode of protection by allowing the bacteria to recognize and destroy foreign viral DNA upon subsequent infections. In a recent Nature study, researchers discovered that bacteria are also able to incorporate spacer DNA from plasmids that contain antibiotic resistance genes. Bacteria that do so inadvertently lose antibiotic resistance by destroying the plasmid, and as a result, are unable to pass these genes on to other bacteria. Exploitation of the CRISPR/Cas locus could allow for the generation of safer bacterial strains with greater resistance to bacteriophages and less antibiotic resistance. This study was led by Dr. Sylvain Moineau of the Department of Biochemistry at Laval University.

A Hidden Hotspot: Scientists at the University of British Columbia have recently solved the crystal structure of the ryanodine receptor found within the endoplasmic and sarcoplasmic reticulum – cellular organelles that surround the nucleus. Mutations in the receptor, which governs the release of calcium ions in muscle cells, have led to serious cardiac and skeletal diseases in humans. Several mutation ‘hotspots’ were identified in the hidden cytoplasmic domain of the receptor, explaining why scientists were previously unable to find any. The findings of Dr. Filip Van Petegem and his team, published in Nature, will allow for the development of new methods to target abnormalities in ryanodine receptors.

Robotic Precision: A new feat from the Department of Mechanical and Industrial Engineering at the University of Toronto – single cell manipulation and patterning with a robotic system. Dr. Yu Sun and his team developed motion control algorithms and integrated this with computer ‘vision’ to allow a robot to track cells in real time, pick single cells up, and then drop them off at precise locations. The machine uses a glass pipette, similar to those used in manual manipulation of cells, and can carry out its daily job at a rate of 15 seconds per cell with a 95% success rate. The device is expected to greatly bolster the speed of single-cell studies, and should prove useful for any studies requiring fine manipulation. Find the study in PloS ONE.

Approval Pathway for Biosimilars and Interchangeable Biological Products: Issues from the FDA’s Public Hearing

On November 2nd and 3rd the FDA held a public hearing to address the challenges it will face in the implementation of the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). This act established an abbreviated pathway for follow-on biologics (a.k.a. biosimilars) that are either “highly similar” or “interchangeable” with previously approved biologics. Many industry stakeholders were in attendance to voice their opinion on the matter including Pfizer, Roche, Merck, Novo Nordisk, Novartis, Amgen, Shire, and TEVA, amongst others. I tuned into these webcasts to extract the salient areas of debate. Read more of this post

Stem Cell Breakthrough: Direct Conversion of Human Skin to Blood

A breakthrough in Canadian stem cell research this week, published in Nature, as researchers led by Dr. Mick Bhatia of the Stem Cell and Cancer Research Institute at McMaster University have devised methods to differentiate human skin cells into blood cells. In many differentiation protocols researchers are forced to first reprogram cells to a pluripotent intermediate before differentiating these primitive cells into the desired cell type. The protocol developed by Dr. Bhatia utilizes a ‘trans-differentiation’ process where skin cells are turned directly into blood cells without the need for reprogramming to a primordial state. As a result, the differentiation process is not only simpler, but safer from a therapeutic standpoint. Read more of this post

Monday Deal Review: November 8, 2010

Welcome to your Monday Deal Review.  The Canadian biotech sector was fairly busy this week, with approximately $17M in investment money flowing into biotech companies reviewed below.  Valeant is certainly raking the leaves this fall following the Biovail merger, settling lawsuits, entering a $1.5bn securities repurchase program, and entering strategic agreements this week after ending a collaboration last week.  Read on to learn more, as well as the usual assortment of biotech news.  Read more of this post

This Week in the Twitterverse

Some weekend reading from our Twitter stream @crossborderbio:

Friday Science Review: November 5, 2010

A Deadly Competitor: The marine bacterium Vibrio cholerae has built-in mechanisms that may allow it to compete with other species of bacteria and better colonize its host. Researchers recently discovered a secretion system (T6SS) in V. cholerae allowing it to inject toxic substrates directly into the cytoplasm of prey. Now a group at the University of Alberta, led by Dr. Stefan Pukatzki, has shown that this strain of bacteria aggressively competes against a number of gram-negative bacteria including Escherichia coli and Salmonella and was able to reduce E. coli survival by 100,000-fold. It would be interesting to see whether the disruption of T6SS could be used as a tool to put a damper on cholera outbreaks and/or increase the time between outbreaks. Find the study published in PNAS.

Signature of Kidney Disease: The most common form of glomerular-based kidney disease is IgA nephropathy (IgAN). Roughly 40% of patients suffering from the disease will experience kidney failure in 10 years. The strongest predictor of clinical outcome in IgAN is proteinuria, or elevated levels of protein in the blood – often albumin. Researchers at the University of Toronto have identified what appears to be a genetic signature of the disease. An in vitro model of proteinuria was created by exposing primary human kidney tubular epithelial cells to high levels of albumin. Gene expression in these cells was then measured with a microarray to derive a panel of 231 “albumin-regulated genes” that were upregulated or repressed as a result of albumin exposure. Researchers then translated this to the clinic by analyzing biopsy samples from patients with IgAN. What they found is that they were able to perfectly segregate biopsy samples from control samples. Convincingly, the panel could be reduced to 11 genes and be used to distinguish any form of primary glomerulonephritis from control, suggesting that this signature could have great utility in predicting clinical outcome in glomerular-based kidney disease in the future. This study included researchers from the University of Toronto, University of Michigan, and University Hospital Zurich in Switzerland. Find it here in PLoS ONE.

Thyroid On the Move: The congenital endocrine disorder hypothyroidism results from improper differentiation, migration, or growth of thyroid tissue. In a majority of cases (~80%), incomplete migration leads to ectopic thyroid tissue. Previous studies with identical twins suggest that the disease is almost certainly caused by somatic mutations or epigenetics as in some cases there have been discordance rates of up to 92%. In a recent study published in PLoS ONE, scientists used microarray analysis to uncover 1011 genes that were either induced or repressed by a factor of 2-fold in ectopic thyroid nodules. Grouping of these genes into gene ontology groups using DAVID (Database for Annotation, Visualization, and Integrated Discovery) identified several clusters of genes related to development and organogenesis. After validating many of these genes, 19 were isolated as being exclusively related to thyroid ectopy. Genes involved in embyronic development (TXNIP) and the Wnt pathway were among those that contributed most to formation. Further work on a larger cohort of patients may allow for elucidation of the molecular mechanisms behind defective thyroid migration during early embryogenesis.

U.S. Therapeutic Discovery Stimulus Reaches Biotechs in Canada, Israel, Germany

As part of the health reform bill, the U.S. launched a $1 billion Therapeutic Discovery Project tax credit/grant stimulus program. The program announced grant recipients this week, deploying $1 billion just over 7 months after the law was passed, and 5 months after the IRS guidelines were released implementing the project.

A full list of recipients has been posted by the IRS, and interestingly includes a “foreign” recipients section comprising: Canada’s Enobia Pharma, Germany’s mtm laboratories, and Israel’s Pluristem Therapeutics (Nasdaq: PSTI). Canadian biotechs with U.S. affiliates also reported receiving grants: Allon Therapeutics, Ondine Biomedical, and Neuraxon, so far.

The massive influx of cash has produced a predictable call for second helpings, while here in Ontario we’re still waiting for a first deployment from the $7 million announced at the end of April.

Q3 Canadian Healthcare Review – Weakness Continues BUT Some Bright Spots

Data in the Q3 2010 Canadian Healthcare Review from the Equicom Group (co-authored by James Smith, Vice President Healthcare at Equicom and myself) shows a continuation of the weakness in biotech financing which we have seen in 2009 and 2010.

Bounceback From the Financial Crisis May Have Masked 2009 Weakness

While the level of funding seen during 2009 was a concern, the problem may have been partially hidden by the many large share price increases from lows they hit as a result of the financial crisis in late 2008. The level of funding in 2010 is lower and the impact of lower funding is now being seen in share price performance. Lower cash resources have resulted in lower activity levels and survival concerns, which has probably been a factor in the 40% or greater share price drop in the first 9 months of 2010 for 31 of 105 healthcare companies in the share price performance assessment. The bright spot is that investors can still make money in the sector, as 13 companies had their share prices increase by greater than 40% in that same period.

Protox and Oncolytics Start Q4 With a Bang

The $35 million dollar financing by Protox announced in September did not count in the Q3 total because the financing was not closed by September 30. The first $10 million tranche of that financing and the recent $25 million dollar bought deal financing by Oncolytics Biotech are a good start for Q4.

Pending Regulatory News May Build Buzz

There are also some upcoming events which could help create a little momentum in the sector. While Cardiome has had a delay in a U.S. Phase 3 study of its iv vernakalant (already approved in the E.U.), the start of Phase 3 trials of the oral version by its partner Merck would be a good boost. Theratechnologies is still waiting for the FDA decision on tesamorelin after the unanimous recommendation from an advisory committee. Bioniche’s parter Endo is expected to both release results from the first Phase 3 study of Urocidin™ and also start the second Phase 3 trial.

Evolution at Valeant and Angiotech

Two large companies continue to evolve. Valeant is slowly exiting from the NCE business and going back to its specialty pharma roots as it gives back clinical programs which were acquired by the prior Biovail management. Angiotech has announced a major debt restructuring which will cut its ongoing financing costs but will also result in major dilution for current common shareholders.

More to Come on Profitable Canadian Healthcare Companies

My focus as a biotech analyst over the years has been the development stage companies. The Canadian healthcare sector also includes numerous companies which are not only profitable but also do monthly distributions to shareholders. I will take a look at these companies in a future post.

Monday Deal Review: November 1, 2010

Welcome to the Monday Deal Review for November 1, 2010.  This week’s review contains the news of a possible recapitalization of Angiotech, following its deferral of interest payments on 7.75% Senior Subordinated Notes due October 1, 2010.  Read on to learn more, as well as other happenings from last week’s biotech scene. Read more of this post

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