Iacocca picks a likely winner — for diabetes patients

Faustman’s data show that low doses of an 80-year-old vaccine temporarily reversed type 1 diabetes in a Phase 1 human trial. The vaccine is called bacillus Calmette-Guerin (BCG). It was developed to prevent tuberculosis and is now available as a generic drug. BCG induces the immune system to make tumor-necrosis factor, which kills the T-cells that cause the pancreas to stop producing insulin.

Faustman’s team went to Iacocca’s foundation for funding after repeatedly having the door slammed in their faces by drug companies. The MGH scientists had plenty of animal studies showing that it was possible to regenerate the pancreas, and therefore restore insulin production in diabetes models. But when MGH went to the pharmaceutical industry looking for funding to research a pancreas-regenerating drug, “everyone said, ‘You’re reversing the disease. How are we going to make money?’ ’’ Faustman says.

So MGH spent years looking for a generic drug that would stimulate the production of tumor-necrosis factor. Iacocca’s foundation supported much of that work, which involved drawing blood from thousands of diabetes patients.

Iacocca instructed Faustman to show that the technique worked in a mouse study, so it could eventually be tried in humans. “No one had ever reversed diabetes in a mouse,’’ she says. “Philanthropy can take risks. He made it clear it was his money and he wanted risky therapies done.’’

Then the foundation put $10 million toward the Phase 1 human trial. All told, Iacocca’s group is the largest single donor to Faustman’s research.

MGH’s Phase 1 study was designed to answer four key questions about BCG, Faustman says: “Does it kill the bad T-cells? Does it induce the good T-cells? Does it change the pancreas? Does it restore insulin secretion?’’ The data, she says, show positive responses in all four outcomes.

One caveat, Faustman says, is that the drug produces only a transient effect. That means it will have to be given in repeated intervals, perhaps every four to six weeks.

Iacocca launched his foundation in 1984 in honor of his late wife, Mary, who died of complications from type 1 diabetes.

The foundation has made a gift of undisclosed size to MGH to support the Phase 2 program, which MGH is now planning. The hospital has raised $8.5 million of the $25 million it will need to support the trial over the next three years. Though Faustman says other partners will be needed to kick in additional funding, she’s certain her team could not have come this far without the help of the former Chrysler chief. “You have to wonder how a guy who built cars knew what we needed to do,’’ she says. “But he knew what risks to take.’’

Arlene Weintraub

A number of top venture capitalists and public investors have shown, through a monster $101 million Series B investment in Waltham-based Tesaro, that the preferred bet of the day is on a proven team of people aspiring to push cancer drugs through the later stages of development.

Tesaro said that Kleiner Perkins Caufield & Byers led the financing, which included founding backer New Enterprise Associates, and new investors that include InterWest Partners, T. Rowe Price, Pappas Ventures, Oracle Partners, Deerfield Management, and Leerink Swann.

The company was founded a little over a year ago by a team of veteran drug developers who made their fortunes by selling MGI Pharma to Japan-based Eisai for $3.9 billion in 2008. The vision for Tesaro has been to scoop up cancer drug candidates that others discovered, but which need further development in clinical trials. Instead of building a company around a new technology platform or asset from a university, Tesaro raised money first ($20 million in May 2010), and used the cash to help in-license its first drug candidate by December.

Tesaro’s big bet now is on rolapitant, a drug from Opko Health for chemotherapy-induced nausea and vomiting, which Tesaro says is ready for the third and final stage of clinical trials normally required for FDA approval. In March, Tesaro obtained other options for its pipeline, licensing cancer drugs from Amgen that are designed to block an enzyme called ALK.

“We are very pleased to have this superb group of new investors join management and NEA in financing the development and expansion of our pipeline of oncology product candidates,’’ said Lonnie Moulder, Tesaro’s chief executive, in a statement. “This new capital will fully fund the development of rolapitant through Phase 3 clinical trials and potential regulatory submissions, and advance the ALK inhibitor program into a clinical trial assessing safety and activity in cancer patients.’’

Luke Timmerman

Just when it looked like there was nothing much left to say about cancer drugs after the huge ASCO conference a couple weeks ago, here come Genentech and Curis with another noteworthy result for skin cancer patients.

Genentech, based in San Francisco, and Curis, its partner in Cambridge, said that their experimental drug for a form of skin cancer passed a pivotal trial of 104 patients. The drug, vismodegib, significantly shrank tumors of 43 percent of patients whose basal cell carcinoma had spread near a skin lesion, and for 30 percent of patients whose disease had spread throughout the body, researchers said.

Based on the result, Genentech said it plans to discuss the next steps with the FDA.

Luke Timmerman ■The American Chemical Society awarded its highest honor, the Priestley Medal, to MIT bioengineering professor Bob Langer, a rare move as the award typically goes to chemists. The society cited Langer’s prolific laboratory and droves of patents, pending patents, and dozens of companies started as the reasons he got the award.

■Tal Medical has been launched to commercialize technology developed at McLean Hospital of Belmont that aims to treat depression using a type of magnetic field found in some MRI imaging machines. The company has about $800,000 in seed funding from PureTech Ventures and other investors, and an Eli Lilly veteran as its chief scientific officer.

This report was compiled by the editors of Xconomy, an online news website focused on the business of technology and innovation. For more New England coverage, visit www.Xconomy.com/boston.