Onyx Pharmaceuticals (ONXX) has agreed to purchase private biotechnology company Proteolix for $276 million in cash, Bloomberg reports. The acquisition will provide Onyx with a late-stage, next-generation therapy to treat multiple myeloma, a form of blood cancer that affects over 180,000 people worldwide. Shares in Onyx rose 5 percent on Monday following the announcement.

Under the terms of the agreement, San Francisco-based Proteolix could receive an additional $575 million for achieving certain developmental and regulatory milestones. Out of the $575 million, Proteolix could earn $170 million for accelerated approval from the U.S. Food and Drug Administration.

Ragweed season is under way, bringing with it sneezes, sniffles, and itchy eyes for 36 million Americans. According to the American Academy of Allergy, Asthma, and Immunology, ragweed is the primary cause of fall allergies. Ragweed season generally runs from mid-August to the first frost. The average ragweed plant produces 1 billion pollen grains, which can travel up to 400 miles carried on the wind.

More than 3.8 million days of work and school are missed each year due to seasonal allergies, or allergic rhinitis. Almost 80 percent of sufferers experience sleep problems, which often lead to loss of concentration and poor work or school performance.

Immunomedics (IMMU) has become the second biopharmaceutical company in recent weeks to announce a successful trial of its lupus drug. The company’s lupus medication, epratuzumab, showed a 24.9% advantage over a placebo in a 12-week Phase IIb clinical trial. Shares in Immunomedics jumped 57 percent to its highest level in 5 years following the announcement.

Five weeks ago, Human Genome Sciences (HGSI) became the first company to report positive Phase III data against lupus. The clinical success of its drug, Benlysta, caused shares in HGS to rise 277 percent in July. Shares in HGS dipped slightly following the announcement of Immunomedics’ results. It has recently been rumored that HGS will be bought out by pharmaceutical company GlaxoSmithKline (GSK), HGS’s partner in developing Benlysta. Both Benlysta and epretuzumab work by targeting the cell activity that leads to lupus.

Just days after the World Health Organization declared a swine flu pandemic, Fierce Biotech reports that two pharmaceutical companies are already racing to complete clinical trials of their H1N1 vaccines. Chinese company Sinovac Biotechnology (SVA) says it can complete a clinical trial by the end of July, while Baxter International (BAX) of Illinois says it has gone into full-scale production and can start filling orders as early as next month.

In order to produce enough doses of the vaccine, Sinovac and other flu manufacturers in China have collaborated to co-manufacture Panflu, Sinovac’s pandemic influenza vaccine with H1N1 virus seed. Baxter has received European Medicines Agency [EMEA] approval for a mock-up pandemic vaccine called CELVAPAN.

by Melanie McFarland

Asian countries such as India and Japan have gained notoriety for their talented scientists and innovative contributions to the life sciences. Now, a new contender is emerging as a potential industry leader. According to a report by Price Waterhouse Coopers, big pharmaceutical companies rated China as the best location for outsourcing in Asia. The country’s large population represents enormous market potential for Western firms whose domestic profits are coming to a standstill. Pharma companies are also drawn by China’s low production costs. The Wall Street Journal estimates that the total cost of a scientist in China is $30,000, compared to $250,000 in the U.S.

For women who survive breast cancer, the triumph of beating the odds is often tempered by a fear of the cancer returning. A study published last year in the Journal of the National Cancer Institute looked at 3,000 breast cancer patients, and found that the group averaged an 11 percent chance of recurrence five years after undergoing adjuvant therapy (such as chemotherapy). That figure was slightly lower for early-stage patients, and slightly higher for stage III patients. After 10 years, the overall group’s risk increased to 20 percent.

A new test promises to help early-stage breast cancer patients determine their risk of recurrence. Clarient (CLRT), a provider of comprehensive anatomic pathology and molecular testing services, is launching a new breast cancer test that helps physicians calculate the probability of a patient’s cancer returning. The test, called the Clarient Insight Dx Breast Cancer Profile, has been clinically validated for women with early-stage, hormone-receptor positive breast cancer. These patients face the critical decision of whether or not to undergo chemotherapy. Knowing their odds of recurrence can assist them in the decision-making process.

The collaboration of two pharmaceutical giants may mark the beginning of an industry shift. GlaxoSmithKline (GSK) and Pfizer (PFE) are combining their HIV drug businesses into a single, jointly owned company that will account for almost 20 percent of the market.

The new company will have a portfolio of 11 existing drugs at its disposal, with six more to be developed. The pairing will allow both companies to pool their resources in a market plagued by daunting financial and scientific challenges. Demand for new HIV drugs is constant, and companies are under intense pressure to make good on their R&D costs. Competitors such as Gilead (GILD) have outpaced GFK and Pfizer in HIV drug sales.

by Andrea Garcia

Scientists at the Scripps Research Institute are developing a new method of vaccination that could potentially be used to provide instantaneous protection whether the target is a cancer cell, flu virus, or a toxin like anthrax in the event of a bioterrorism attack.

Cynosure (CYNO) released preliminary fourth quarter results last week: the company expects revenues of $25 million to $26 million; in the same quarter last year, Cynosure reported revenues of $36.6 million.

The company had been profitable for eight consecutive quarters, but will report a $2.2 - $2.7 million loss in Q4. Financial results include a charge of $2.5 million related to uncollectible accounts from customers affected by the economic downturn and tightening credit markets.

It’s been a roller coaster of a year for AngioDynamics (ANGO). In the past, I’ve professed my high opinion of the company. I still like ANGO and I think it’s fairly valued, but a less than stellar quarter should give growth-obsessed investors pause. The company expects revenues to shrink by $5 million in 2009.

Access sales, historically a slow-growth business for the company, were $16.1 million in the most recent quarter, an increase of 2% year-over year. Oncology / Surgery sales grew 13% to $10.6 million.

Endologix (ELGX), developer of Powerlink, a treatment for abdominal aortic aneurysms [AAA], posted another strong quarter. I am an unabashed fan of the company which, in November, rejected a $98 million ($2.25/ share) buyout offer from New York-based hedge fund, Elliott Associates. Commenting on that decision, John McDermott, Endologix President and CEO, said,

“We believe that Elliott’s proposed valuation does not reflect recent FDA product approvals, increasing gross margin and our expectation of achieving positive operating cash flow in the first half of 2009. Additionally, we believe that volatility in the capital markets has negatively affected micro-cap companies like Endologix, and we expect the situation to improve in the future.”

Irvington-NY based Electro-Optical Sciences (MELA), developer of The MelaFind System, a handheld imaging device that detects melanomas at an early stage, announced last week that its pivotal trial sites have closed: all follow-up data has been received and is now undergoing third-party statistical validation. The company will announce top-line results in the next few weeks.

For many investors, the news has been a long time coming. Shares of the company, which had been trading near a 52-week low, have increased by 50 percent.

The FDA has approved NovaDel’s (NVD) Zolpimist, an oral spray for the short-term treatment of insomnia. Zolpimist contains zolpidem tartrate, the same active ingredient found in Ambien. Until recently, the U.S. patent for zolpidem was held by the French pharmaceutical giant Sanofi-Aventis (SNY). In April 2007, the FDA approved 13 generic versions of the drug.

Using NovaDel’s oral spray, zolpidem is absorbed through the oral mucosa directly into systemic circulation. In bypassing the GI tract and liver, the same therapeutic benefits can be achieved more quickly. The drug can reach effective blood levels in as little as 10-15 minutes.

Synergetics USA (SURG) reported first quarter revenues of $12.2 million, an increase of 17% over the year ago period. More compelling was the increase in net income: $661,000 in the most recent quarter compared to $397,000 in Q1 2008, a 66% improvement.

In the past year, the Synergetics team, led by Chairman Robert Dick, has implemented various programs that have helped grow top-line revenue, reduce debt, increase profitability and improve operational efficiencies.

Changes are afoot at Queensbury NY-based AngionDynamics (ANGO). The company said on Wednesday that it would begin the search for a new CEO to replace company co-founder Eamonn Hobbs.

Hobbs will continue on as Vice Chairman of the Board of Directors where he will focus on the company’s newly acquired irreversible electroporation (IRE) technology. Hobbs described his strengths and ambitions as “entrepreneurial in nature” and the opportunity in IRE as “enormous and immediate”.

Regular Sentinel readers know I’m a fan of Endologix (ELGX). The developer of a minimally invasive treatment for abdominal aortic aneurysms has had a slate of positive news of late. In addition to two new FDA clearances, in its third quarter, the company significantly improved its liquidity position and is on track to begin generating positive operating cash flow in the first half of 2009.

When the New York-based hedge fund, Elliott Associates, offered to buy Endologix for $98 million, or $2.25 per share, I described the unsolicited proposal as a ‘lowball bid’. Today comes news that the company’s board has rejected the proposal.

During times of economic malaise, discretionary income tends to decline. For many, it’s difficult to justify spending money on one’s appearance. Over the past several quarters, as consumers have cut back, investors have lost confidence in the aesthetics sector.

Among laser aesthetic companies, Palomar (PMTI), Cutera (CUTR), Cynosure (CYNO), and Candela (CLZR) have all seen significant declines in share price. In most cases, they’re trading near five-year lows.

NxStage Medical (NXTM) may be losing steam. The maker of dialysis products reported third quarter revenues of $30.5 million, a slight decrease from the $31.6 million reported last quarter. (Call Transcript)

While revenues in the company’s home dialysis business grew slightly ($12.4 million in Q3 2008, compared to $11.9 million in Q2), revenues from the company’s Medisystems in-center business (acquired in June 2007) were $13.7 million in the third quarter of 2008, compared to $15.4 million in the second quarter and $16.1 million in the first.

Third quarter revenues at Clarient  (CLRT) increased 59% to $19.0 million from the $11.9 million reported in Q3 2007. This marks the company’s 17th consecutive quarter of sequential revenue growth. Higher testing volume, a favorable service mix and higher Medicare reimbursement rates drove revenues.

Testing volume for the third quarter of 2008 increased 53% year-over-year. The company will add several new growth drivers in coming months. These include the launch of the long awaited Insight Dx Breast Cancer Profile, and the introduction of the Insight Dx Prostate Profile, licensed from Health Discovery Corporation. In September, Clarient announced that, with Definiens, it will develop and commercialize tools to help evaluate quantitative biomarkers that predict cancer treatment response.

Quarterly revenues at Cynosure (CYNO), a developer of laser-based aesthetic systems, grew 21% year-over-year, from $31.5 million in Q3 2007 to $38.2 million in the most recent quarter. Second quarter revenues were $39.2 million.

Net income for the third quarter of 2008 was $3.2 million compared with net income of $4.4 million for the same period last year. (Call Transcript)