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WOBURN, Mass., Feb. 16, 2004 — Whether the subject is a business model or a strand of DNA, U.S. Genomics Inc. knows quite a bit about squeezing through tight spaces.
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The company was founded in 1997 with grand visions of using nanoscale devices to analyze a person’s genome in minutes rather than months. Four years later, researchers were well on their way to that goal — just as demand for such “personalized medicine” devices dried up.
Suddenly the squeeze was on for U.S. Genomics in very real terms. The company hired a new chief executive, who made collaborations and product development a top priority. Several government research grants and $25 million in venture capital soon followed. All that led to the U.S. Genomics of today — poised to release its first product, a microfluidic chip to analyze individual small molecules.
Stephen DeFalco, chief executive officer, admits that the company’s original vision of sequencing a person’s genome while he sits in the doctor’s office “is still a ways away.” The chief hurdle is cost. Sequencing a mammalian genome runs into the millions of dollars — so far, with precious little reward for pharmaceutical companies.
But, he says, U.S. Genomics’ underlying premise of tagging a molecule and then speeding it through a microfluidic channel still has many applications in drug research and biowarfare detection. Sure, the pharmaceutical industry currently favors late-stage drug compounds over early-stage research, “but that doesn’t mean they’re not spending gazillions on this stuff anyway.”
The technology itself can be likened to forcing spaghetti through a strainer. A target molecule, tagged with fluorescent probes, sits at the wide end of a channel only a few microns wide and one micron high. It is jostled against several pillars in front of the entrance, which prod it to stretch into one long strand. The strand runs through the channel, and lasers read tags on the molecule as it passes along.
“If we can tag it, we can see it,” DeFalco says.
For example, researchers could tag small strands of RNA and proteins to see how they interact. The molecules are placed in assays held in a standard 96-well plate, and then piped through the chip where lasers detect and measure the reactions. U.S. Genomics’ analyzer, called Trilogy, can sniff out as few as 0.5 of the target molecules from 1 million other background molecules in a sample.
That precision differs from current technology, polymerase chain reaction. PCR essentially duplicates a fragment of DNA so scientists have a sufficiently large sample to study. By omitting that amplification step, the company says, U.S. Genomics’ technology is cheaper than PCR, and it lets researchers study many molecules (like RNA and protein) that can’t be amplified at all.
David Englert, principal scientist at GeneXP Biosciences Inc., said RNA in particular vary widely in their behavior and need a chip that catches them in their all their heterogeneous glory. “The advantage is that you can see rare events. … There is a real advantage in that technology,” he said.
And U.S. Genomics is not alone in the field. United Kingdom-based Solexa Ltd., as well as 454 Life Sciences Corp., Perlegen Sciences and VisiGen Biotechnologies in the United States, all pursue various approaches to high-speed genome sequencing or single-molecule analysis. Looming over all these startups is Applied Biosystems, the $1.68 billion (sales) giant that dominates DNA sequencing today.
Zachary Zimmerman, an analyst with Life Sciences Insights, pegs the genome sequencing market at about $800 million annually, with Applied Biosystems owning at least 80 percent of it. Zimmerman says startups like U.S. Genomics must still prove their technology, but he expects pharmaceuticals to swoon once they believe high-speed sequencing works.
“Clearly this is something new and revolutionary, and Big Pharma will be interested,” he says.
One challenge for U.S. Genomics will be convincing the pharmaceutical industry that the technology is worthwhile.
“There is an unmet need,” says Andrew Broderick, analyst with SRI Consulting. But pharmaceutical companies “are faced with one new technology after another. … At this point, they are saying ‘Show me the proof.'”
DeFalco and his 55 employees are trying to do that now. U.S. Genomics is collaboration with 22 institutions, such as Dartmouth College and Massachusetts Institute of Technology. It also has $1.2 million in government contracts from agencies such as the Defense Advanced Research Projects Agency and the National Science Foundation to see how its technology could find dangerous pathogens in air samples.
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Company file: U.S. Genomics Inc.
(last updated Feb. 16, 2004)
Company
U.S. Genomics Inc.
Headquarters
6H Gill Street
Woburn, Mass., 01801
History
U.S. Genomics founder Eugene Chen left Harvard Medical School in 1997 as a second-year student, after raising seed money for his fledgling company.
Industries served
Biotech analysis and instrumentation (research, drug discovery, diagnostics)
Employees
55
Small tech-related products and services
U.S. Genomics has developed a system (the GeneEngine Technology Platform) that permits high-speed single-molecule DNA, RNA and protein analysis without amplification processes. The GeneEngine platform incorporates both DirectLinear Analysis (large-scale genomic mapping) and DirectMolecular Analysis (color coincidence counting) technologies. This has ramifications for faster development of pharmaceuticals and diagnostic systems.
Management
Financials
1998: company receives $300,000 in seed funding from the Still River Fund and private investors. 2000: company receives $2 million in early stage funding from previous financing participants.
2001: company receives $17 million in expansion round funding from Still River, J&J Development Corp., Healthcare Ventures, CB Health Ventures and undisclosed individuals.
September 2002: company receives $500,000 DARPA grant.
May 2003: company receives nearly $25 million in expansion round funding from Zero Stage Capital, Fidelity Biosciences Group, CDIB (China Development Industrial Bank) and previous participants Healthcare Ventures and CB Health Ventures.
July 2003: company receives $6 million in expansion round funding from CDIB and Still River.
September 2003: company receives $500,000 NSF Phase II SBIR grant, furthering research undertaken with an October 2002 Phase I grant.
Selected customers and strategic partners
Selected competitors
Barriers to market
As major pharmaceutical companies explore molecular analysis, they are bombarded with new technologies. It may be a challenge for U.S. Genomics to convince these potential clients of the accuracy and cost benefit of its technology.
Relevant patents
Methods of analyzing polymers using ordered label strategies
Molecular motors
Contact
URL: www.usgenomics.com
Phone: 781-937-5550
Fax: 781-938-0060
E-mail: [email protected]
— Research by Gretchen McNeely