Feb. 18, 2004 — Dust Inc., a Berkeley, Calif., developer of low-power wireless mesh sensor networks, raised a $7 million first round of funding, according to a news release.

Foundation Capital led the round. Institutional Venture Partners and In-Q-Tel also participated.

The company is developing wireless sensor network products for applications in building automation, industrial monitoring and homeland security. The company says its networks are designed for reliable monitoring with no maintenance for years at a time.

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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

Eugene Chan: founder, board member

J. Craig Venter: chairman, scientific advisory board

Stephen DeFalco: chairman and chief executive officer

John Canepa: chief financial officer

Steve Gullans: chief scientific officer

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

Dartmouth College

MIT

Washington University

Wellcome Trust Sanger Institute

Selected competitors

454 Life Sciences Corp.

Applied Biosystems

Perlegen Sciences

Solexa

VisiGen Biotechnologies

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

Feb. 12, 2004 — Zyomyx Inc. (News, Web), a Hayward, Calif.-based developer of biochips for protein analysis, announced it has raised $10 million in funding.

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Credit Suisse First Boston Private Equity led the round. Existing investors Alloy Ventures, Lilly BioVentures, Hambrecht & Quist Capital Management, Mediphase Venture Partners and Bio One Capital Pte Ltd. also participated.

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The company’s president and chief executive, Bob Monaghan, said in a prepared statement that the investment will let the company expand the line of its biochip platform, which was introduced in 2003. Zyomyx expects to launch its next biochip in April, in addition to more chips later in the year.

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Feb. 6, 2004 — There is a growing mantra in the nanotech community that molecular nanotechnology (MNT) and its precursors will clean up the toxic mess left by older technologies, then produce clean energy and materials to replace them.

Yet each time that I suggest building such features into nanotechnology from the start, the reply is: “We’ve got other things to worry about such as how to build the darn assembler and keep it militarily secured, and besides that it might be hard to achieve such perfection with early versions.”

This is disturbingly reminiscent of “nuclear power will give us clean limitless energy, and don’t worry, we’ll deal with the byproducts later because we’ll have the tools by then.”

However, we can avoid such risks from the start by using “self-regulating assembly” and “disassembly.”

Self-regulating assembly means built-in controls that limit replication rates of molecular assemblers. Surprisingly, there is virtually no talk of such newly discovered processes that occur naturally.

For example, “nanobacteria” are organisms less than a micron wide that already achieve this Holy Grail. They have a very slow replication rate — a “limiting” factor that stops them from turning everything into gray goo despite their prevalence in the environment.

One genus found in human disease has an ingenious way of self-cloaking with a calcium phosphate shell. This disguise led medical researchers to misidentify the organism as a lifeless deposit in heart and other diseases. Such a shell is also a formidable defense against drugs, radiation and heat used in treatments.

How does this link with MNT research? Scientists have been looking for ways to build self-regulation into assemblers. Nanobacteria warrant study because they approximate the envisaged size of some assemblers and replicate in days instead of minutes or hours. This sets them apart from most viruses and regular bacteria.

Then we come to disassembly — a concept well known among nanotechnologists. There are many ways to “disassemble” something.

One is with an assembler working in reverse to take something apart element by element, molecule by molecule, or chemical by chemical into components that can be discarded or reused. Present-day manufacturers do this on a primitive scale with some old cars, but that is only a rough analogy.

Next there is biodegradability: incorporating a chemical trigger that makes a material degrade via measurable pathways into harmless components that nature can reuse. This is done now with biodegradable packaging.

Finally, there is rapid oxidation, i.e. incineration, which today is largely an ecological disaster. Oxidation is a treacherous area because the tendency might be to say, “We can just burn everything cleanly.” But it’s not that easy. Energy balances and atmospheric/oceanic heating also must be considered. But with pure MNT materials this might be achieved cleanly if done right.

We have many disassembly options. I argue that it is possible and necessary to incorporate them into a “Law of Disassembly” that says every MNT product must be disassemblable by at least one such pathway.

Why can’t this discussion wait? Here’s why: Primitive non-MNT nanotechnologies are already creating products that cannot yet be disassembled in such pathways. Complex coatings and integrated nanomaterials that are hard to take apart are being manufactured now, albeit in smaller quantities that so far have negligible impacts. We can’t blindly continue to say that someday we’ll know how to decommission them.

Most nanotechnologists whom I talk to say that disassembly is a great idea but not practical in the near future. Is this expediency instead of careful thought?

In my experience managing scientists, I have seen that natural disassembly happens all the time via chemical synthesis, biodegradation, and combustion. It is a rule, not an exception. Moreover, the concept of disassembly in the wet chemistry that is basic to nanotechnology is well known and often referenced, so such capacities are not limited to nature.

If we don’t consider such options now, then we may build assemblers that are fundamentally defective from environmental and military security viewpoints.

Would such a “Law of Disassembly” stick a green albatross around the neck of MNT researchers?

On the contrary, it may be the key to our future security. But if the message is misinterpreted as a green pinko socialistic back-door ploy to kill new technology, then it won’t get off the ground. And we’ll have a mess. So it has to be properly presented. That means serious research and careful presentation.

This does not mean putting a moratorium on MNT research, as some environmentalists have suggested. It means accelerating research into molecular assembly and disassembly.

Organizations such as the Center for Responsible Nanotechnology are well positioned to put this forward, because self-regulating systems and disassembly have enormous ethical and military implications. There are many practical examples today of natural as well as synthetic disassembly to study.

The Law of Disassembly is a challenge that I put to nanotechnology developers and to the community that funds and regulates them.