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Callida Genomics Inventor Emerges to Co-Found Next-Gen Sequencing Shop

NEW YORK, May 30 (GenomeWeb News) - A familiar face has re-entered the next-generation sequencing community.


Complete Genomics, which aims to develop a low-cost sequencing technology, was incorporated in March and is currently setting up shop in Silicon Valley. The company is a spin-off of Callida Genomics, the former Hyseq subsidiary that had been working on a low-cost whole-genome sequencing technology based on sequencing-by-hybridization.


Rade Drmanac, Callida's president and CSO, is also co-founder and chief scientific officer of Complete Genomics. At Callida, Drmanac has been working on a technology that combines random genomic DNA arrays and combinatorial probe ligation chemistry in order to create a platform that could lower the cost of re-sequencing a human genome to around $1,000.


With some undisclosed "intellectual property agreements" with Callida in hand, Complete Genomics will now try to develop "the results of a lot of research at Callida" into a marketable sequencing technology, according to CEO Cliff Reid. However, Reid stressed that Complete Genomics' technology "could be completely different" from the approach Callida outlines. He also declined to confirm whether the array-based SBH method under development at Callida would be the principle behind his firm's technology. "We are experimenting with all sorts of things," he told GenomeWeb News.


Callida Genomics was founded in 2001 as a majority owned subsidiary of Hyseq. Its mission was to develop and commercialize Hyseq's sequencing-by-hybridization technology and a high-speed DNA-sequencing chip. For the chip portion of its strategy, Callida created a subsidiary, N-Mer, which used its SBH technology and Affymetrix's microarray technology. Hyseq held a 90-percent stake in Callida and Affymetrix owned the remaining 10 percent. Hyseq acquired Variagenics in 2003 and was renamed Nuvelo.


In late 2004, Drmanac, who is also a Hyseq co-founder, bought Callida rom Nuvelo through a holding company he founded called SBH Genomics. Callida currently employs 15 people and sells a low-throughput resequencing service and product, called HyChip, according to its website.

Complete Genomics, which currently shares office space with Callida, received $6 million in seed funding earlier this year from OVP Venture Partners and Enterprise Partners Venture Capital. Complete Genomics is in the process of making several hires and will probably move into its own premises later this year, according to Reid.




The idea for Complete Genomics took shape a little more than a year ago when Drmanac and Reid first met. Reid had founded and taken public two software companies - Verity, a business software company he founded in 1988 that was recently acquired by Autonomy for $500 million, and Eloquent, a digital video company he founded in 1995 that is now part of Open Text. 


An MIT graduate, he decided to "walk the halls" of his Alma Mater to come up with an idea for a new company. "This time, much to my surprise, I ended up not in the computer science department but in the biological engineering department," he said, and got interested in computational biology. After meeting Drmanac, the two decided to write a business plan and raise the seed funding for Complete Genomics.


The company has not yet decided on its business model - for example, whether it will sell equipment, reagents, or provide services. "One of the things we are about to undertake is a survey of all the competitors to find out what's working and what isn't working in the marketplace," Reid said.


"Until we understand the markets we are targeting, which applications, which buyers, we cannot even speculate when we will go to market," he added.


Reid's main aim for the coming year is to advance the business and technology far enough to be able to raise Series B funding, since the seed funding is "much less money than what will be required to commercialize this technology," he said.


The sequencing-by-hybridization technology, also called sequencing by combinatorial probe ligation, that Callida Genomics has been working on - which may or may not become part of Complete Genomics' approach -- involves using random arrays of genomic DNA and short labeled probes that cover all possible sequences.


According to Drmanac, Callida has been developing the array production method since 2003 with a two-and-a-half-year, $2.3-million biodefense grant from the National Institute of Allergy and Infectious Diseases entitled "Comprehensive pathogen diagnostics with rSBH system." That project aims to develop a prototype pathogen diagnostics product that can sequence complete genomes and diagnostic genes of Yersinia pestis and Bacillus anthracis from cell culture and blood samples, according to the grant abstract.


Callida also developed the combinatorial probe ligation chemistry that is currently used in the company's current low-throughput re-sequencing offerings. Unlike sequencing-by-synthesis approaches such as those used by Solexa and 454, which read one base per cycle, Callida's probe ligation method in principle can read between four and eight bases per cycle, Drmanac said.


Another advantage of Drmanac's approach, he said, is its potential ability to extract haplotype information, or assemble the sequence of both sets of chromosomes of a human genome, which requires special computation.


The company markets its HyChip resequencing service on its website as a tool for discovering mutations and heterozygotes, splice variants in cDNA clones, population variability in targeted genes, as well as for comparative sequencing of genes in closely related species.


Drmanac and Reid said Complete Genomics has no ties to a Norwegian company of the same name that had also been developing a DNA sequencing technology. That company, founded by Preben Lexow in 2000, apparently no longer exists.

Julia Karow covers the next-generation genome-sequencing market for GenomeWeb News. E-mail her at [email protected].

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