At A Glance:
- Krassen Dimitrov, director of DNA Microarray Laboratory, Institute for Systems Biology, Seattle.
- MS — Bioengineering, Sofia University, Sofia, Bulgaria.
- PhD — Biochemistry, Baylor College of Medicine, Houston.
- Postdoc — University of Washington.
Krassen Dimitrov, 35, is a scientist who is quickly learning about the benefits of a business education: One of his former technicians, now an MBA student, has developed an award-winning business plan created around a microarray labeling technology Dimitrov developed.
Amber Ratcliffe, ISB’s microarray laboratory manager before entering the MBA program at the University of Washington, and another MBA student, Aaron Coe, recently won $15,000 and another $6,000 in legal services by placing third in a business plan competition at Purdue University, for their microarray labeling company, Nanostring Technology. The business plan is now one of 16 companies in the finals of the University of Washington’s Business Plan Competition, which was held May 20.
Dimitrov has worked with microarrays since 1998, dating from his postdoc days under Leroy Hood and Roger Bumgarner at the University of Washington, and then, in 2000, becoming the director of the microarray laboratory at the Institute for Systems Biology.
Suddenly, Dimitrov is considering the viability of commercializing his technology and spinning out a company. He spoke with BioArray News last week.
Let’s start by walking through the technology.
Basically, it’s a single-molecule label. We are going to label each individual molecule. It’s highly multiplexed, you can have several monochromatic labels, and you can assemble them onto a composite label and achieve a high degree of complexity and multiplicity because the labels are distinguishable both spectrally and spatially. You can see the order on the label and you can distinguish different colors. Basically, one label for each gene, or maybe, multiple labels targeting splice variance and so forth.
How do you read the labels?
The proof of principle work was done in-house with regular microscopic techniques. You can use any kind of microscopy. For the product, we will have to have a dedicated scanner that we will have to develop.
What bottleneck does it solve?
This technology was born out of frustration with all the limitations that microarrays have: The accuracy and sensitivity of microarrays are low compared to other techniques such as RT-PCR. We expect our accuracy and sensi-tivity to be higher than other technologies that are available. When you go down to single molecules, that’s the ultimate sensitivity. The accuracy benefits a lot through our digital readout. Our technology sees and identifies each molecule in the sample, and then it counts the molecules of the same kind. That provides much higher robustness and accuracy than the array technique, where you get a fluorescence intensity signal, which is an approximation of what is there in the sample.
Labeling is clearly one of the challenges associated with microarrays.
We have solved that. Our whole technology is the labeling and the identification combined. In every other technology, encoding and labeling are split. In micro-arrays, the encoding is spatial: The identity of each gene is determined by the x-y coordinates on the array. Then, you have the labeling that gets you the quantity of the sample that hybridizes to the spot. There are other ways. Luminex has encoding on beads, which is achieved by a combination of fluorescent dye onto the bead. Then, you have to use a separate dye to label and quantify.
What does your probe look like?
It looks like a string of monomeric nanometer-sized labels that are spatially and spectrally separate, hence the name Nanostring.
Where is the technology in development?
The normal technological development life cycle is: concept, proof of concept, prototype, and product. We are pre-prototype stage. So, what we are looking at now is funding to get us from the proof-of-concept to prototype stage.
How much does that require?
Amber Ratcliffe did a very detailed cost analysis. The figure she came up with is $6 million.
Have you actually started showing your business plans outside of the competitions?
We have had four or five initial meetings with venture capitalists. All of them but one are local. One of them was in Indiana where we presented at Purdue. Also, we have got some interest from a large diagnostic company but I can not disclose the name.
What is your elevator pitch?
We have a technology that makes gene analysis much faster and more accurate and less expensive than existing technology.
How do you feel about the funding possibilities?
My philosophy is that these things go in waves. There are moments of retraction, moments of normalcy, and moments of exuberance, and they go back and forth. The climate is very slowly starting to improve, based on the reception that we have seen so far. When we started the company, the country was starting to get into Iraq, and the stock market was at a low. Now it is going up, so I think the climate is very slowly starting to improve for investing into companies.
Funding is what we are mostly concentrating on. Until we get the money to hire people, we can’t expand the development effort. Initially, everybody was telling me scary things, how investors shy away from any risk, how they are only looking at companies very close to commercialization, and that nobody is looking at the early stage. [But] the comments that we have so far have been very positive. Something that nobody expected was that VCs were calling us instead of us calling them.
Who owns the IP?
The institute funded the research as a research project. We started the company after we got the proof of concept. The institute owns the IP and will retain an equity stake in Nanostring whenever the company is funded.
Tell me how the company was formed.
I knew that eventually this technology would need to be commercialized and a spinoff formed. Amber, who used to work for me before she went to do her MBA studies, came to me and said “there is this business plan competition, would you mind taking this technology there?” I said the exposure wouldn’t hurt.
To be completely honest with you, just before the competition at Purdue, I really thought the business plan didn’t look especially good. A few days before the plan was to be submitted, I went on vacation in Whistler, and I forgot about it. Then, when I got back, I found out that we were among the finalists. I got the plan and it looked extremely good. So, they actually did some heroic work, all nighters, to get it done. From that point, the ball started rolling. We were the highest ranking student presentation in the Purdue competition because, apparently, they allow professionals to present too. We got very interesting contacts there. We had a preliminary round here at the University of Washington, where we fared well and we got invitations from VCs after the preliminary round.
Things are going very fast.
What does Lee Hood think about this?
Lee Hood gets extremely excited about this thing. I have to remind him that we have two to three years of product development to do. There is still a development cycle that we need to go through and a lot of unknowns related to that.
Are you going to quit your day job?
That is not decided yet. This is a great, great job here with excellent collaborations, and exciting science. On the other hand, If you really want to get your technology done, nobody else will do it for you. We’ll have to see what develops.