Nanosphere is wheeling and dealing
years before DNA detector’s release

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Oct. 7, 2002 — Nanosphere Inc., which hopes to make a DNA detector inexpensive enough to become ubiquitous, just got a spirit-lifting boost: a contract from the federal government to develop a specialized device that can test water supplies for anthrax and other diseases that might be used by bioterrorists.

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The U.S. Government Technical Support Working Group (TSWG), an interagency group formed to prototype new antiterrorism technology, will pay Nanosphere a multimillion-dollar sum (exact figure undisclosed) to create a device that can be used by people with no molecular biology training to quickly detect infectious agents at very low concentrations.

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It was the second government nod in less than a month. In September, the National Institutes of Health gave Nanosphere two grants totaling $1.5 million to develop diagnostic tests to assess genetic risk factors for hypercoagulation disorders and colorectal cancer.

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No doubt about it, Nanosphere is on a roll. In May, the company made the Red Herring 100, a business list devoted to top technology entrepreneurs. And though a clinical product is years away, Nanosphere already signed up an Asian distributor, Takara Bio Inc. of Japan, which will also co-develop products and take an unspecified equity stake.

Based in Northbrook, Ill., a few miles from its mother ship at Northwestern University’s Institute for Nanotechnology in Evanston, Nanosphere launched in 2000. It seeks to make handheld DNA detectors that can identify any substance with a unique genetic fingerprint — different strains of bacteria or viruses, cancerous cells, HIV, or, as the TSWG hopes, biological weapons. The detectors could be used in physicians’ offices, at hospital bedsides or on the battlefield, and could analyze very tiny samples.

Nanosphere’s technology uses gold nanoparticle probes and microarrays of electrodes. The nanoprobes are coated with a string of nucleotides that complement one end of a target sequence in the sample. Another set of nucleotides, complementing the other end, is attached to a surface between two electrodes. If the target sequence is present, it anchors the nanoprobes to the surface like little balloons. When treated with a silver solution, they create a bridge between the electrodes and produce a current.

A February paper in the journal Science said the technique is 10 times more sensitive (fewer false negatives) and 100,000 times more selective (far fewer false positives) than other techniques in common use. A single chip could contain electrode pairs to test for thousands of biological targets at once.

Company co-founder Chad Mirkin, whose research group invented the technique, says it’s likely to have a clear edge over current practices that require DNA samples to be amplified by polymerase chain reaction (PCR), a time-consuming process. “Why send a sample to the lab and bite your knuckles for three days?”

A tabletop DNA detector for research labs should be in testing by the end of the year, said Vijaya Vasista, chief operating officer, who was lured away from a secure job at Baxter International because, “I had a visceral reaction to the potential of the technology.” The handheld will take at least two years beyond that and will face the more formidable hurdles of FDA approval for clinical devices.

Vasista said pricing for the handheld would probably follow a “razor and blades” model: the device might cost several thousand dollars, with disposable cartridges for specific tests, or batteries of tests, at various prices depending on their complexity and the demand for them.

Using figures from several industry analysts, Nanosphere estimates this year’s total genomics market opportunity at about $4.3 billion, mostly in clinical research laboratory expenditures and in-vitro diagnostics, growing to more than $7 billion by 2005.

Plenty of other companies are in the DNA detector race. All are using different approaches. All will need to beat the cost-benefit ratio of current techniques. “Bedside DNA testing has been talked about for awhile now,” said analyst Raylene Ballard of ECRI, Plymouth Meeting, Pa., a nonprofit organization that evaluates medical technology for health care providers.

“It will become the preferred way because there’s a direct relationship to the quality of care when you can eliminate a two-day wait for test results. But it has to work well and be fairly cheap so that insurers are willing to pay for it.”


Company file: Nanosphere Inc.
(last updated Oct. 7, 2002)

Nanosphere Inc.

1818 Skokie Blvd. Suite 200
Northbrook, Ill., 60062

Established in 2000 to commercialize gold nanoparticle-based DNA detection technology developed at Northwestern University’s Institute for Nanotechnology.

Medical diagnostics


Small tech-related products and services
The company hopes to have a DNA analyzer ready for release to research labs in late 2002 or early 2003; a clinical-use handheld version is being prepped for beta testing in 2004. Nanosphere’s products use gold nanoparticles with amino acid sequences bonded to their surfaces, as well as electrode microarrays.


  • Vijaya Vasista: chief operating officer
  • William Cork: chief technology officer
  • Bill Athenson: vice president of business development
  • Northwestern Universities professors Chad Mirkin and Robert Letsinger (emeritus) were company co-founders.
  • Selected strategic partners and customers

  • In October, Nanosphere signed a multimillion-dollar contract with the U.S. government’s Technical Support Working Group (TSWG). The contract calls for Nanosphere to optimize its pathogen detection platform into a system for testing water samples from multiple sources. Since the system will detect signature nucleic acid sequences of known warfare agents (e.g., anthrax), water samples can be assessed even at low contamination levels.
  • In July, Takara Bio Inc. announced an agreement with Nanosphere that would allow for the integration of the two companies’ bio- and nanotechnologies. Takara picks up exclusive sales rights in the Asian market and will offer Nanosphere its DNA amplification technology for use in collaborative development of detection devices.
  • Investment history
    A $3 million first round of financing, including individual investors and the Lurie Investment Fund, closed in March 2000. Nanosphere’s $5.5 million second round of financing closed in March 2001 with the same participants. The company hopes to close on $15 to $25 million in additional financing very soon; the round is open to other investors and VCs. In September, Nanosphere received $1.5 million in National Institutes of Health grant monies for the development of genetic risk factor assessment systems targeting cancer and hypercoagulation.

    Barriers to market
    The handheld biodetection market is crowded and involves divergent technologies. The industry is also slowed down by a lengthy regulatory approval process, as well as the challenge of gaining physicians’ and laboratories’ acceptance of new and unfamiliar technologies.

    Short-range goal: To get an initial product into beta testing in research labs. Long-range goal: An inexpensive hand-held DNA analyzer.

    What keeps them up at night
    Managing growth of the organization at a sustainable level, said Vijaya Vasista, Nanosphere’s chief operating officer..

    The pathogen detection and biodiagnosis market is glutted with competitors. Selected players include:

  • Affymetrix
  • Cepheid
  • Orchid Biosciences
  • Quantum Dot Corp.
  • Qiagen
  • Nanogen
  • Contact

  • URL:
  • Phone: 847-562-8880
  • Fax: 847-562-8886
  • E-mail: [email protected]
  • Selected patent
    Nanoparticles having oligonucleotides …

    Recent news and publications

  • Nanosphere nets $1.5 million in grants
  • Researchers find faster way of detecting diseases
  • Japan’s Takara Bio ties up with U.S. biotech firm Nanosphere
  • — Research by Gretchen McNeely


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