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With Light Biology s Assets, Patents, NimbleGen Consolidates its IP Position

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With the purchase of the startup Light Biology of Dallas last week, microarray services provider NimbleGen Systems says it has consolidated the intellectual-property underpinnings of its business.

Madison, Wisc.-based NimbleGen, which is developing a maskless micro-array manufacturing process to fuel its service-based business, acquired all of Light Biology’s assets and patent rights for an undisclosed sum.

Light Biology is a three-year-old startup developing a maskless microarray manufacturing process devised by Harold “Skip” Garner, a professor of biochemistry and internal medicine at the University of Texas Southwestern. Hisprocess is based on micro-mirror technology developed by Texas Instruments and is now used for projecting video as well as PowerPoint displays.

“Combining with NimbleGen makes a strong intellectual property platform; there are no conflicts,” Garner said.

The sale is an evolutionary step for NimbleGen, Stan Rose, president of the firm, told BioArray News.

Originally, NimbleGen was formed to develop and eventually commercially distribute the platform as a laboratory benchtop instrument — a goal the company still lists on its website — but this announcement does not bring that lofty ambition any closer.

“Our commercial strategy remains the same,” he said. “This transaction consolidates our IP position with respect to using digital light technology to make arrays.”

So, users should not expect to see any kind of NimbleGen Systems desktop microarray manufacturing instrument any time soon, or to see the company begin to do its microarray processing and manufacturing in the US. Currently, the company does its microarray processing with a facility in Iceland, thus far avoiding disputes over the Affymetrix portfolio of patents.

The patent for Light Biology’s device, US Patent No. 6,295,153, was issued Sept., 25, 2001. Garner is listed as the inventor, and the patent was assigned to the University of Texas regents.

Light Biology and NimbleGen’s approach to microarray manufacturing attempt to address a perceived lack of flexibility in using photolithographic semiconductor manufacturing techniques, such as the system pioneered by microarray industry leader Affymetrix, to manufacture microarrays. In Affymetrix’s system, masks are created to block and unblock light, which is used to catalyze chemical reactions to construct chains of nucleic acids at specific points on glass substrates.

This manufacturing process is efficient for the mass manufacturing of microarrays but requires additional costs, in capital and time, to change patterns once a design for a high-density array is fixed. And in a time where researchers are uncovering new gene sequences almost daily, it often becomes necessary to retool microarray designs.

The inefficiencies of the semiconductor approach create a niche that the ink-jet based manufacturers in the industry’s top tier, Agilent Technologies and Amersham Biosciences, are just beginning to address. Agilent offers customizable areas on its catalog microarrays, while Amersham is preparing a custom array product offering for its CodeLink line of microarrays.

Affymetrix in the short term has addressed this problem by underwriting design fees for large consortia of buyers, as illustrated by the company’s recent rollout of a grape GeneChip microarray (See BAN 1/14/2004).

However, many consider this lack of design- and manufacturing-flexibility as an enticing market opportunity that is fueling the expansion of a second tier of microarray manufacturers and services-providers seeking to exploit it. Early-stage chip ventures in this area include not only NimbleGen, but Germany’s Febit, as well as Xeotron, another Texas-based outfit also using similar micro-mirror-based technology.

As a whole, this tier of manufacturers is beginning to offer researchers access to custom-made arrays, containing whatever genetic information is desired, at price points competitive with Affymetrix’s GeneChips.

Five-year-old NimbleGen, a spin-off of the University of Wisconsin, is commercializing technology licensed from the university. The company’s core technology contains approximately 800,000 aluminum mirrors on a computer chip, which are used along with photo-deposition chemistry to create high-density arrays of oligonucleotides in a matter of hours. The company’s photochemistry was developed by the University of Konstantz and is marketed through NimbleGen’s wholly owned German subsidiary, Chemogenix.

“The under-appreciated part of NimbleGen is the unique proprietary chemistry we use to have a higher yield,” said Rose. Yield, he explained, is important in a chemical process such as building nucleotides into a chain, where starting with a more accurate reaction yields better results throughout the many iterations required to create the oligonucleotide probes on a microarray.

Light Biology’s patented platform integrates Digital Light Processing technology owned by Texas Instruments, and when first developed, used Affymetrix’s optical deprotection photochemistry.

“We worked collaboratively with Affymetrix when this technology was developed,” said Garner. “They were interested in how this technology was being advanced. They allowed me to purchase raw materials from their suppliers to make the arrays.”

With the transaction, Texas Instruments becomes a shareholder in NimbleGen, joining the University of Texas Southwestern Medical Center, which received NimbleGen equity in the transaction, according to Lawrence Allred, director for venture development for the university.

He said that while the company had a strong patent position, other companies were ahead in their commercialization efforts.

“We thought NimbleGen was the leader among those,” said Allred. “And we thought this was the right way to go when others were ahead of us, to be a part of a much stronger entity.”

The package of assets and intellectual property, he said, are under no encumbrance to any other corporate entity.

And, while the technology was developed using Affymetrix’s chemistry, with the company’s permission, that chemistry is not required. “It can be done with any photochemistry,” he said.

The University of Texas joins Germany’s Schott Nexterion, which was the lead investor in NimbleGen’s $12 million Series D funding announced in April 2003. Other investors in NimbleGen include ITX Corporation of Japan, Skyline Ventures, Venture Investors, Baird Venture Partners, Tactics II Investments, the State of Wisconsin Investment Board, and The Wisconsin Alumni Research Foundation.

Light Biology was established in 2001 by StarTech Early Ventures, a Richardson, Texas-based business accelerator.

Garner will join NimbleGen’s scientific advisory board.

“My position on the board is strategic, to help figure out how to best place this technology and products, and to optimize the business and science capabilities,” Garner said. “My lab has focused not only on the initial technology but expanding the repertoire that can be done on this type of chip.”

The list of assays possible using this technology, and appropriate sample preparation, include comparative genomic hybridization, methylization profiling, and genomic annotation for microorganisms, Garner said.

His lab has created and published a number of algorithms for each of the applications, as well as creating software tools.

“The great things about [the two platforms] is that once you have established a way to design the chips, it is a straightforward process to make kits available or perform it in a service lab environment,” he said. Commercialization of these applications could be accomplished in a matter of months — once a decision is made to go forward, based, of course, on corporate needs, he said.

Rose said that the discussions between the two companies were already in process when he joined NimbleGen in September.

“Both of us have been independently working on applying digital light processing technology to the synthesis of high density oligonucleotide arrays,” he said. “Inevitably, when you get two different groups working on something, you are going to come up with different solutions. We think there is a great synergy there, and we are going to compare approaches, and over time, try to use the best that makes up both.”

This transaction comes at a time when NimbleGen, among the first companies to offer microarray analysis using the whole human genome on a single chip, ramps up its commercial efforts with broader visibility at industry events and shows.

“We are working pretty hard at getting the name out,” said Rose. “The last three years, we have really focused on technology development.”

He declined to comment on the company’s revenues for 2003 but said commercial progress for the company has been “phenomenal.”

As part of its promotional efforts, the company is once a month giving away a microarray analysis project, limited to 10 free microarrays.

Rose is bullish on growth opportunities in the basic research market.

“There are an incredible number of individual investigators in the life sciences who recognize the power of high-density arrays,” he said. “Just walk into any biology department and take a survey of the organisms and the issues being studied and you will see the diversity of biological analysis is incredible. There are tens of thousands of different organisms being studied, and yet there are only catalog arrays for a handful of those genomes.”

Garner said he has three fully automated microarray synthesizers in his laboratory. However, reproducing that instrumentation for sale to other labs is a goal that first will require “technical maturation, as well as business and intellectual property maturation,” he said.

But, as a service offering, it satisfies the desire that investigators have to “obtain the answer they want without investing in a huge infrastructure or a fairly complicated machine,” he said.

— MOK

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