Genomics One, the Laval, Québec-based genomics research products firm, is looking to make a splash in the microarray industry with the acquisition of a new technology that it hopes will provide a base for the company to build on.
The firm, which currently distributes other manufacturers’ microarrays in the US and Europe, last week signed a letter of intent to purchase the technology from Accurate Biogene Systems, a Toronto-based start-up. The company was vague in providing details of the technology, but Genomics One President and CEO Suzanne Lebel told BioArray News, “I can tell you the sensitivity of the microarray is increased by about a thousand.”
“If you compare side by side, and we have compared against others in the market,” she said, “the difference in signal is really amazing.” Lebel said the firm had compared the results of the new technology with Affymetrix and other “well-known” microarray platforms.
“There [are] a number of steps involved in having these better results,” Lebel explained. “The first one is the design of the probe itself that is used, another one is in the slide itself — it is not a conventional slide — and also the washing technique that’s used. It’s a three-step process, and that’s what’s covered under the [US and international] patents here.”
The new platform is expected to be ready for launch about six months after the acquisition is completed, which Genomics One anticipates will happen at the end of this month. The firm also intends to do custom gene expression analysis for clients.
Canada will be the first market for the new microarray platform, Lebel said, because the firm’s sales force is already in place there, and the new biochip division Genomics One is forming to oversee development and sales of the product will be based in Toronto.
Genomics One intends to sell the platform itself, but it also is looking into partnerships with other manufacturers and holders of microarray intellectual property, Lebel said.
“This technology is going to be applicable to DNA, RNA proteins, and tissue. That makes a world of difference,” she said. “So, we’re in discussions with a couple of groups to set up partnerships to further advance the technology and offer these applications. At the moment, we concentrated step one on DNA. The next wave of products would involve tissue and proteins.”
Lebel said the firm is currently evaluating pricing for the platform and couldn’t provide an estimate. But, she said the firm would compete both on price and technological advantages.
“We know our technology is way superior in resolution, specificity, and all that,” Lebel said. “We’re counting on that. But we’re also going to have pricing that’s going to be quite competitive. We might do what competitors have done, which is offer introductory pricing.”
The new platform is expected to provide a boost to Genomics One’s bottom line and increase margins on the products it sells. The firm, which went public in Canada in 1999, initially based its business on its TrueBlue DNA cloning vectors and kits.
It subsequently purchased Canadian genomics products distributor BioCan Scientific and its US-based subsidiary, and has since launched products under the BioCan name, including the TrueBlue products, monoclonal anti-OX2 antibodies, and a variety of OEM products, such as modifying enzymes and nucleic acid markers manufactured by Promega.
Genomics One has gone through a reorganization over the past few years, which included layoffs and the resignation of its previous chief scientific officer, and its financial growth had stagnated. But with the acquisition and a round of financing pending, the firm appears to be on track for building its business.
Although the firm finished the quarter ended June 30 with only $762,439 in the bank, it is paying for the microarray technology primarily with stock, which closed at CA$.27 (US$.21) on the TSX Venture Exchange on Sept. 14, the day the acquisition was announced.
Genomics One will pay Accurate Biogene an up-front payment of 300,000 shares at closing of the purchase. Then, it will pay 600,000 shares upon reaching certain sales milestones, which Lebel said she anticipates will happen in about a year. The cash consideration is CA$50,000.
Accurate Biogene employs three people, two of which — the inventors of the technology and founders of the firm — will join Genomics One, bringing its total number of employees to 18. The third employee of Accurate Biogene is a surgeon who will work with Genomics One on a consulting basis.
The firm is in the process of lining up investors for a private round of financing, but Lebel could not say how much it was seeking to raise or whether the acquisition is contingent upon the firm getting the anticipated funding. She does expect the cash infusion to help speed up development of the new microarray technology and fund further acquisitions.
“We’d prefer to raise that money to go fast in the development,” she said. But, “we’re looking at the financing for more than just this acquisition. If we keep going as is without the acquisition, we could keep going for quite a while. With the acquisition, there’s no way we’d be able to continue with only this amount of money in the bank and undergo our R&D program.”