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HTG to Spend $16M in New Financing to Develop Tests, Hire More Staff

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By Justin Petrone

HTG Molecular Diagnostics plans to invest the $16.2 million it raised in a recent Series D financing round to support its ongoing diagnostic and technology-development programs and to grow its sales and marketing team, according to its CEO.

TJ Johnson told BioArray News this week that HTG aims to boost adoption of its multiplex gene expression-testing platform in three business areas: molecular testing for translational medicine, pharmaceutical clinical development, and clinical pathology diagnostics.

"The main use of [the] proceeds is building our diagnostic team and development programs while scaling up our customer-facing resources in sales and marketing," Johnson said.

Tucson, Ariz.-based HTG announced on June 13 it had closed the second and final tranche of its Series D fundraising. The company raised $15.7 million in the first tranche in February.

SR One, the corporate venture capital arm of GlaxoSmithKline, was a new investor in the round, joining existing investors Novo A/S, which led the round; Fletcher Spaght Ventures; Merck Capital Ventures; Solstice Capital; and Valley Ventures.

Johnson said that HTG's "primary need was to raise growth capital so we can properly scale the company," adding that it will not require additional funds in the short term.

HTG now intends to invest in "next-generation improvements to its core technology, automation, expansion of applications, and new proprietary tests," the company said.

The bulk of these investments will go toward new hires, mostly for test development. "We are deploying the dollars into expanding our staff and nearly doubling our headcount," said Johnson.

HTG, founded in 1997, currently has 35 employees. Johnson said that the company has already doubled its field sales and marketing team, and is hiring diagnostic-development scientists as well as funding technology development programs.

Test Expansion

HTG's core technology is its quantitative nuclease-protection assay, or qNPA platform. It enables researchers to observe gene-expression levels in hundreds or thousands of samples simultaneously, but without requiring RNA extraction, cDNA synthesis, RNA amplification, or RNA-labeling steps, which are often performed on other gene-expression platforms.

The qNPA assay relies on an internally developed lysis buffer that is added to prepare the RNA in samples. Gene-specific DNA oligonucleotides are then added directly to the buffer and hybridize to present RNA.

Following additional treatments, the DNA oligos that remain become a stoichiometric-representative library of the original RNA sample and can be quantified using HTG's ArrayPlate Detection System.

HTG currently sells qNPA ArrayPlates that can analyze gene-expression levels in as many as 47 multiplexed genes in a 96-well format. The company has also made its assay platform-agnostic by striking deals with other tool manufacturers. For instance, it penned an alliance with Luminex last year and one with Roche NimbleGen in 2009 (BAN 5/25/2010, BAN 10/20/2009).

While HTG has traditionally sold its products to researchers, it has in recent years set its sights on the clinical molecular diagnostics market, which culminated in March when it changed its name from High Throughput Genomics.

According to Johnson, scientists can use the qNPA assay to profile gene expression in paraffin-embedded, formalin-fixed samples as part of an extraction-free protocol — an ability that gives HTG an edge in the diagnostics space.

"Although we effectively handle most sample types, we offer the greatest advantages with FFPE," said Johnson. "Our extraction-free protocol is effective assessing the soluble and non-soluble RNA in FFPE."

He also cited a "significant market need" to work with smaller sample sizes and said the firm's assays "work effectively with less than a single 5-micron section of tissue."

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Both attributes — to analyze FFPE samples and to be able to work with small amounts of sample — could attract clinical researchers who rely on the "valuable and precious" source of information that FFPE archives represent. They could also be helpful to clinical molecular-testing laboratories that want to analyze more genes from smaller samples, Johnson said.

He said that HTG envisions its technology being used in three ways. The first is as a way to validate gene-expression signatures in large FFPE cohorts.

Johnson noted that HTG can design arrays to look at 47 genes per sample on its ArrayPlate platform; 500 genes per sample on the Luminex XMap platforms; and 2,600 per sample on custom Roche NimbleGen arrays.

Secondly, HTG's technology is already being used in "several" companion diagnostic-development programs. "We have the ability to assist pharmaceutical companies validate their biomarkers, develop clinical trial assays to better target their clinical studies, and transition these assays into downstream companion diagnostics," Johnson said.

HTG already offers a qNPA human, rat, and mouse microRNA array service. The arrays are manufactured by Roche NimbleGen.

Finally, HTG has ongoing internal diagnostic-development programs in melanoma, lung cancer, and lymphoma. Johnson declined to discuss the programs in detail, but said that the firm is "excited" about the initial data.

"Being an Arizona-based company, we have a strong connection with skin cancer and we have a commitment to bring added testing capabilities to these patients and their caregivers," he said.

According to Johnson, when the tests are completed they will be commercialized on the firm's next-generation ArrayPlate platform.

"We have the reagent assays, an automation platform for qNPA, and a new imager under development," Johnson said.

Johnson noted that HTG's assay is currently semi-automated. "The reagent pipetting, hybridizations, and washing are done by independent equipment with plates being manually moved," he said. The firm is now "well into validation of an instrument that automates all of the steps to the front end of our assay," he said. This newer, automated system will be available later this year.

HTG's need for a new imager "comes from industry improvements to optics technology," Johnson noted. While the firm's current imager is "very sensitive," HTG is developing a new imager that will be designed under "full quality system procedures for future 510(k) submission" to the US Food and Drug Administration that "integrates the newest optics technology for sensitivity and cost effectiveness," Johnson added.


Have topics you'd like to see covered in BioArray News? Contact the editor at jpetrone [at] genomeweb [.] com

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