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ABI Hinged VisiGen Deal on SeqWright s Scientific Chops, Not Investment; ABI Continues Fishing

NEW YORK, Nov. 7 (GenomeWeb News) - In sports, players sometimes negotiate to land on teams with the best-skilled players in hopes of improving their chances of winning a championship. This same reasoning is what seems to have led Applied Biosystems to hinge a pending partnership with VisiGen Biotechnologies on SeqWright.

 

According to a person close to the pending ABI-VisiGen deal, the Applera unit is more interested in SeqWright's scientific contributions than its monetary investments.

 

Last week, SeqWright announced that it was making an undisclosed follow-on equity investment in VisiGen, making an ABI-VisiGen partnership almost a certainty. To ABI, SeqWright's investment was a key condition before it would buy its own stake in the next-generation sequencing technology company.

 

On its face, it may seem odd for ABI, a billion-dollar sequencing leader, to hinge its investment on the small, privately owned SeqWright; this kind of condition, which is likely part of ABI's due-diligence, is uncommon but plausible. It now appears that what ABI was really after was ongoing guarantees that SeqWright would continue to help VisiGen develop its technology.

 

"I think it is more of SeqWright's involvement than just the money part," said Fei Lu, CEO of SeqWright. "ABI really wanted SeqWright's involvement on the technology development. They wanted SeqWright to put in the scientific effort. And probably, when (an) instrument comes out, they wanted more SeqWright involvement on testing the instrument." Lu declined to disclose the amount her company recently invested in VisiGen. ABI declined to comment for this article.

 

ABI's condition is understandable: SeqWright was founded by Richard Gibbs, director of the Baylor College of Medicine's HumanGenomeSequencingCenter. Since the fall of 2004, when SeqWright made its first undisclosed investment in VisiGen, Gibbs has been a VisiGen director and has been working closely with the company by providing scientific input. Both shops inhabit a holding company in a Houstonbiotech park.

 

Gibbs has been instrumental in helping develop the technology, which involves engineering both polymerase and nucleotide triphosphates to act together as direct molecular sensors of DNA base identity in real-time, according to industry sources.

 

In addition to providing scientific expertise, SeqWright is also helping VisiGen raise money. Even before ABI made its overture, SeqWright had been "aggressively looking into other partners to bring into VisiGen," Lu said.

 

But even ABI's cash and clout won't guarantee that VisiGen's instrument will gain traction in the market ahead of emerging rivals. Though Kevin Corcoran, vice president and general manager of ABI's genetic analysis business unit, has said ABI is expected to start collaborating with VisiGen by the end of the year, the company is being careful not to put all of its sequencing eggs in one basket. It's been well known for a few weeks that the company has been developing its own alternative sequencing technologies, and is considering partnering with other companies.

 

"We have a very active internal investment program in next-generation sequencing technologies, but I think it's wise for AB to be continuously surveying what's going on in the marketplace," ABI president Cathy Burzik said in a conference call to investors last week. "We want to keep our fingers on all of these different technologies that are being developed. So, we are actively looking at those."

 

She also said that researchers eager to try out VisiGen's technology will have to wait awhile. "It will be a long time," Burzik said after being asked when she expects to commercialize a VisiGen instrument. "This is not something [where] you expect a product instantaneously. This is very early-term research."

Applera CEO Tony White added: "What's apparent is that there are going to be a variety of applications in the future both in the applied markets and the research market, and sometimes in the clinical market, that are going to delineate the best [sequencing] platform for that application, and so I don't believe there's going to be one comprehensive platform for all the future applications. That may have been the case recently with CE Sanger-type technology that could be used for all of these, but in the future there may be different needs for different platforms."

 

The recent announcements by ABI end months of silence from the company on their next-generation sequencing strategies. The company continues to be tight-lipped about its impending equity investment in VisiGen and is keeping quiet about specific next steps.

 

"I can't predict over time exactly what action we are going to take, but we are not limited by the one action we have taken so far with VisiGen," Burzik said during the conference call.

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