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Canadian Startup Xagenic Raises $1M to Fund Chip-Based Molecular Diagnostics Platform

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This article has been updated from a version posted Oct. 15 to include additional information from the company.

By Justin Petrone

Xagenic, a Toronto-based company developing a menu of chip-based tests, recently received over C$1 million ($996,000) in financing from Canadian investors.

Lead investor MaRS Innovation said in a statement that it committed C$500,000 to the firm. The remainder of the funding includes a C$300,000 loan from the Health Technology Exchange; C$200,000 from the Ontario Institute for Cancer Research; and C$40,000 from the Ontario Centre of Excellence for Commercialization of Research.

Xagenic founder and CEO Shana Kelley told BioArray News this week that the firm will use the funding to develop an advanced prototype of its platform as well as diagnostic assays targeting a variety of indications. The year-old firm is also seeking additional funds and hopes to soon close a Series A round of financing, she said.

Xagenic was established in the second quarter of this year to commercialize technology developed in Kelley's lab at the University of Toronto, where she serves as director of the division of biomolecular sciences. Kelley is co-founder of GeneOhm Sciences, a diagnostic company acquired by Becton Dickinson in 2005 while she was on the faculty of Boston College. Xagenic's IP is licensed from both the University of Toronto and Boston College.

The firm is creating a class of chip-based molecular diagnostics that rely on nanostructured microelectrodes to support a "PCR-free method for detecting very small units of nucleic acids and cells in clinical samples," Kelley said.

"We tried to build the technology from the bottom up to circumvent problems encountered by other technologies for point-of-care diagnostics," she said. "This is all being rolled into one sample-to-answer system for diagnostics."

According to Kelley, what separates Xagenic's technology from others is the absence of a PCR step in sample preparation. She describes the firm's assay as a "one-step process, nothing analogous to the nucleic acid separation that other technologies require," but declined to further elaborate.

Kelley and fellow researchers have published articles in various journals over the past few years describing the application of the technology. A paper in ACS Nano last year demonstrated how multiplex sensing arrays were manufactured by coarse photolithographic microfabrication. Using the chips, the authors analyzed a panel of mRNA samples for prostate cancer-related gene fusions.

According to MaRS Innovation, tests based on Xagenic's platform can be completed in less than 30 minutes, and the firm's nascent platform has the potential for detecting many conditions, "from bacterial infections to genetic disease and cancer."

A presentation on MaRS Innovation's website also describes the platform as capable of detecting the hybridization of RNA and DNA sequences with a one-step readout. In addition, the system includes an electrochemical reporter system that provides built-in signal amplification.

Kelley said that Xagenic's assay is capable of surveying dozens of sequences at once. "It relies on a chip capable of multiplex detection, looking at 10, 20, 100 sequences at a time," she said, noting that "most diagnostic applications only require 10 or 20 or 30 markers."

Xagenic has no plans to create a research-grade instrument and is focused solely on the clinical market, Kelley added. Should it come to market with a test, the company's most direct competitor could be Pasadena, Calif.-based GenMark Diagnostic, which sells a menu of US Food and Drug Administration-cleared in vitro diagnostics for warfarin sensitivity, thrombophilia risk, and cystic fibrosis carrier detection for use on its microelectrode array-based eSensor XT-8 system.

Xagenic's investors are convinced of the technology's clinical potential. Raphael Hofstein, CEO of MaRS Innovation, said in a statement that Xagenic's platform "addresses critical and unmet clinical needs in hospitals, clinics and doctors' offices." He noted that it was "still early days" for Xagenic, but added that the investment "sends a strong signal to researchers working in our partner institutions."

MaRS Innovation is the commercialization agent for 16 Toronto academic institutions and is supported by the Canadian government. Fellow Xagenic investors HTX, OICR, and CCR are all funded by the Province of Ontario.

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