The Cross-Border Biotech Blog

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

Monthly Archives: June 2013

Monday Deal Review: June 24, 2013

Welcome to your Monday Biotech Deal Review for June 24, 2013!

The past weeks’ big news is Antibe’s IPO, which resulted in approximately $2.1 million in proceeds. Antibe also concurrently made a private placement of shares with two private investors.

Valeant also made big news with the announcement of a public offering for proceeds of $1.75 billion, and a senior notes offering of about $3.2 billion.

Get the details on these major stories, and many more, by following the break.

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Friday Science Review: June 21, 2013

Arthritis is a highly prevalent disorder, affecting about 1 in 5 people in North America, and is characterized by joint inflammation, which results in pain and reduction in joint mobility. Underlying these symptoms is the release of a peptide called substance P, so called because of its role in signalling pain. New research published in the Journal of Neuroscience from the lab of Dr. Alfredo Ribeiro-da-Silva at McGill University indicates that joint pain associated with arthritis may be due in part to increased activation of substance P-releasing nerve cells caused by inappropriate sprouting of sympathetic nerve fibers. The authors induced arthritis, which was characterized by joint edema and increased pain responses, in the hind ankle joint of rats. Using immunohistochemistry, the authors found that sympathetic nerve fibers, which normally innervate blood vessels in the skin to regulate blood-flow, sprouted to innervate the synovial membrane surrounding the ankle joint and the upper dermis covering the ankle joint four weeks after the arthritic phenotype was induced. Interestingly, these newly sprouted sympathetic nerve fibers closely associated with peptidergic nerve cells, which release substance P and are associated with transmitting pain responses. This result suggests that sympathetic nerve sprouting can increase the activity of substance P-containing neurons, exaggerating pain responses and inflammation. Consistent with this, pharmacologically blocking sympathetic nerve responses in these rats shifted the pain threshold back near normal. The authors also found that the expression of mature nerve growth factor (NGF), which is necessary for sympathetic neuron growth and survival, was increased near the ankle joint in which arthritis had been induced. The authors suggest that activity of peptidergic nerve cells increases joint and skin inflammation which initiates an immune response leading to increased production of mature NGF. The increase in NGF leads to sympathetic nerve sprouting, a further increase in peptidergic nerve cell activity, and ultimately to hyperactive pain signaling. These findings suggest that decreasing the production of mature NGF near arthritic sites can decrease sympathetic nerve sprouting and reduce arthritis associated pain. Additionally, localized inhibition of sympathetic neurotransmission may be a way to provide short-term arthritis pain relief.

Friday Science Review: June 14, 2013

Embryonic stem cells are pluripotent, meaning they have the ability to differentiate into multiple cell types. Due to this, embryonic stem cells have the potential to be used in cell-based therapies to treat diseases in which specific cell types are lost, such as Alzheimer’s or diabetes, or to promote recovery following traumatic events, such as spinal cord injury or stroke. However, the use of embryonic stem cells is controversial for a number of ethical reasons, with specific concern surrounding how they are harvested. Induced pluripotent stem cells (iPSCs) offer an alternative to embryonic stem cells, because they can be derived from differentiated host tissue. Because changes in gene expression within embryonic stem cells lead to their differentiation and loss of pluripotency, iPSCs can be produced from differentiated cells by essentially reversing these changes. New work published in Nature from the lab of Dr. Benjamin Blencowe at the University of Toronto identifies muscleblind-like RNA binding proteins (MBNL1 and MBNL2) as regulators of specific gene splicing events that differ between embryonic stem cells and differentiated cells. Using high-throughput sequence profiling and quantitative polymerase chain reaction, the authors found that MBNL proteins are expressed less in embryonic stem cells and iPSCs than in differentiated cells. This led the authors to hypothesize that MBNL proteins repress expression of certain sequences of RNA that maintain the pluripotent state of embryonic stem cells. To examine if this was the case, the authors used small interfering RNA to decrease the amount of MBNL1 and 2 protein expressed in cultured mouse and human cells. In approximately half of these cells, decreasing the MBNL proteins altered the splicing of the FOXP1 gene, a gene important for triggering a switch between embryonic stem cells and differentiated cells, and returned the cells to an embryonic stem cell-like pattern of FOXP1 expression. It was also possible to do the opposite: over-expression of the MBNL1 and 2 proteins in mouse embryonic stem cells caused these cells to quickly adopt the FOXP1 splicing pattern seen in differentiated cells. Importantly, knockdown of MBNL proteins increased the level of several transcription factors that are critical for maintaining pluripotency of embryonic stem cells, and significantly increased the number of iPSC colonies. These results demonstrate that MBNL proteins 1 and 2 are directly involved in the control of embryonic stem cell pluripotency, and that reduction of their expression in differentiated cells can lead to induction of iPSCs. MBNL expression is therefore an attractive therapeutic target to create pluripotent cells for use in cell-based therapies, as the use of iPSCs eliminates many of the ethical concerns surrounding the use of embryonic stem cells for such therapies.

Pulse of the Canadian healthcare sector (Part 2): funding continued development of early stage companies

Wayne Schnarr - seriousThe second question posed in Part 1 of this blog series was how can the continued development of these early stage companies be financed?

Ten to fifteen years ago, funding of early stage companies came primarily from the following sources.

  • There were VC groups within the major Canadian banks, which no longer exist as the banks decided this was not an appropriate use of their capital.
  • A key player in many syndicates was MDS Capital Corp., which had both a classical VC fund and managed the labor-sponsored fund CMDF. Now Lumira Capital, it is focused on exiting from its many U.S. investments but looks at new investments in later stage Canadian companies, such as the $35 million financing by Thrasos Therapeutics in October 2012.
  • Large pension funds were limited partners in some VC funds but have now generally opted for direct, lower risk and income-generating healthcare investments.
  • Retail-based funds were created as a result of government tax incentives, including the LSVC or labor-sponsored venture capital funds. Poor performance resulted in many of these funds facing redemptions which have been substantially higher than new investments for several years. The situation was compounded by some provinces (e.g. Ontario) eliminating their portion of the tax credit and now the federal tax credit will be slowly withdrawn.
  • Some investment funds were mainly funded by provincial governments, primarily in Quebec.
  • U.S. VC funds were syndicate partners in some of the larger financings.

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Pulse of the Canadian healthcare sector (Part 1): the pipeline of new technologies and early stage companies

Wayne Schnarr - seriousI attended the two Canadian healthcare conferences organized by Bloom Burton on May 21st and 22nd, 2013. Other important conferences were also held in May, including BIO, CVCA (Canadian Venture Capital Association) and most recently ASCO. A report on the Canadian sector has been released recently by PwC Canada and Ernst & Young released their 27th annual biotechnology industry report. All of this activity and information has prompted me to review my perspective on the pulse of the Canadian healthcare sector.

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Monday Deal Review: June 3, 2013

Welcome to your Monday Biotech Deal Review for June 3, 2013! The past week’s major news was Valeant’s major acquisition of Bausch + Lomb for a combined debt and equity amount of $8.7 billion, bolstering its ophthalmology business heavily. Bausch + Lomb will retain its name and become a division of Valeant, withValeant’s existing ophthalmology businesses being integrated into the newdivision. The transaction creates a global eye health business with estimated pro forma 2013 net revenue of more than $3.5 billion. The acquisition is suggested to be a response to growing eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets. 

Also on the M&Eh front, Resverlogix is continuing with their proposed spin out to Zenith, as covered last week. The shareholders of Resverlogix approved the special resolution required to conduct the spin out. 

Meanwhile, Angiotech is distributing the proceeds it received from the sale of its Interventional Products business to shareholders, and RepliCel signed an agreement with the cosmetic giant Shiseido for the development and licensing of hair regrowth technology pioneered by RepliCel.

Get the scoop on these deals and many more by hitting the break!

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