Little OpGen, which made its debut in 2003 and the following year boasted a single customer, has by all accounts truly turned a corner. The company, which initially planned to have a service-only model for its optical mapping technology, recently announced a deal with an instrument manufacturer to turn that tool into a product customers could bring in-house. With close to 50 customers last year, the potential of demand from the next-generation sequencing market, and new scientific advisors Bud Mishra and Thomas Anantharaman from New York University, the OpGen of 2006 is a whole new animal.
In April, OpGen teamed up with Stratos Product Development to come up with a commercial instrument based on the four machines currently running at the company. A similar alliance with Micronics, meanwhile, is aimed at designing the disposable reagents for the instrument.
The new business model — a shift from services to placing instruments with customers — stems from a demand that OpGen couldn’t meet, according to CEO Joe Shaw. “The service business is doing well, but demand, frankly, is exceeding our capacity,” he says. Take that and combine it with the reluctance of potential customers to hand off their DNA samples or sequence information to an outside company, and you’ve got a good argument for selling instruments, Shaw says. Whether any single customer has high enough demand to justify buying an instrument, however, remains to be seen.
Shaw and his crew will first target the clinical microbiology community with the instrument, which is expected to run around $225,000 and be in beta testing by the first quarter of next year. Since optical mapping is often used to detect isolates of a particular organism, for instance, Shaw says it’s a natural fit for situations such as identifying an infectious agent — and possibly even being used to help fit a particular antibiotic treatment to a patient.
Meanwhile, demand for OpGen’s technology has gotten a somewhat unexpected boost with the next-generation sequencing tools on the market. Techniques like 454’s, which produce much shorter reads than traditional Sanger sequencing, are helped along by a long-ranging scaffold from which to hang the reads. Colin Dykes, OpGen’s CSO, says that optical maps “can certainly work as a scaffold” for this type of read, and complement the base-by-base information with higher-level data including rearrangements, insertions, and deletions. Shaw says OpGen has had “a number of clients” who have approached the company because they couldn’t properly assemble 454 reads. Given that Solexa, Helicos, Agencourt, and other next-gen sequencing technologies nearing the market all share the short-read problem, OpGen could be well positioned to introduce its technology to a whole new clientele.
The company is currently in the process of closing a new round of funding worth about $15 million, Shaw says. In another change for the OpGen crew, longtime scientific collaborator David Schwartz is no longer closely tied to the company, Shaw confirms. Instead, Schwartz’s former NYU colleagues Mishra and Anantharaman have joined the company’s scientific advisory board.
— Meredith Salisbury