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Lumicyte Battles Arch-Rival Ciphergen For Protein Profiling Biochip Dominance

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Protein profiling biochips are hot. But the battle between the two chief purveyors of this technology, Ciphergen Biosystems and its upstart arch-rival Lumicyte, is so hot that somebody is bound to get burned.

Ciphergen, of Fremont, Calif., recently sparked a flurry of interest in its SELDI (Surface Enhanced Laser Desorption/Ionization) protein biomarker chips through a February Lancet article in which researchers used this technology to find a set of biomarkers for the often elusive, deadly disease of ovarian cancer.

Then last week Lumicyte — which is also located in Fremont and is headed up by former Ciphergen chief scientific officer William Hutchens — stoked the publicity fires with a tantalizing announcement that it would be teaming up with researchers at “several leading medical centers” to use its own SELDI-based protein chips in studies to evaluate “newly discovered protein biomarker profiles for the early detection of various cancers.”

“Right now, our goal is to work with physicians and physician groups who are on the front lines of treating patients, and supplying information and services for the diagnostic and therapeutic needs of patients in prostate cancer, ovarian cancer, and breast cancer primarily, to see if the protein patterns that we have recognized do indeed have clinical utility,” said Hutchens.

Hutchens said the company would disclose results from a couple of earlier collaborations to identify these biomarker profiles before the American Association for Cancer Research meeting in the beginning of April. But in the meantime, other than revealing that one of the collaborators is Michael Lieberman of Baylor College of Medicine, the company is tight-lipped about these collaborations.

For Lumicyte, getting this scientific validation of its technology, and moving it downstream into the clinical arena is arguably more important than it has been for Ciphergen. Lumicyte, which has raised over $20 million in Series A and B financing and has 50 employees, is the upstart compared to Ciphergen, which is publicly traded and had over $77 million in the bank at the end of 2001. While Ciphergen focuses most of its business around selling its biochips and instrumentation to pharmaceutical and biotech customers — who then bear the burden of eliciting scientific results from them — Lumicyte has molded itself as an R&D company that uses the SELDI technology in-house to find answers.

Other differences: Ciphergen’s SELDI chips and instruments are basic and can be used in the ordinary lab, while Hutchens claimed that Lumicyte has taken the SELDI technology and refined it to a stage where the chips are “unparalleled in performance.” Also, while Ciphergen chips do not allow identification of proteins, Hutchens said that Lumicyte’s chips, and the processes that the company’s scientists have evolved for using them, do allow identification of proteins subsequent to their clinical validation.

Additionally, Lumicyte bioinformatics experts say they have developed a “very powerful suite of pattern recognition and data analysis software” that not only uses support vector machines and clustering algorithms, but proprietary algorithms developed in-house, to read and interpret the profiles generated by the SELDI chips.

“Right now Lumicyte is using advanced SELDI technology in the form of advanced biochips, hardware, and software to help solve problems of drug development,” Hutchens said. “We provide services in the form of milestone-based success fees to help pharmaceutical companies identify classes of patents that have early evidence of disease onset.”

This difference in business plans is no accident, but in fact arises from the companies’ closely intertwined histories. Lumicyte and Ciphergen both license the SELDI technology from their common progenitor, Molecular Analytical Systems. In the early 1990s, after Hutchens and members of his lab at Baylor College of Medicine developed the SELDI technology, they founded MAS, which licensed certain aspects of the technology to its subsidiary Ciphergen Biosystems. According to Hutchens, who served as president of MAS, then chief scientific officer of Ciphergen until he left in 1999, the rights that Ciphergen licensed covered SELDI-based products but not services. These are the rights that Lumicyte licensed from MAS in 1999 after Hutchens started this company. “Lumicyte holds the exclusive right to use the SELDI technology and to sell SELDI-based services and information to the life sciences industry,” Hutchens said.

If this were Ciphergen’s view as well, the two sibling companies would perhaps just go on to carve up the products and services niches of the SELDI protein biochips market, respectively. But in fact, Ciphergen and Lumicyte vehamently disagree over this issue, and Ciphergen has sued Lumicyte in California state court to resolve it.

“Ciphergen has a license that allows it to sell SELDI-based serv -ices and information products,” stated John Storella, Ciphergen’s vice president for intellectual property. “Hutchens told us that we didn’t have this license and were in breach of the technology transfer agreements.”

Ciphergen filed the lawsuit in July 2000 asking for a declaration that it did have these rights and that the license to Lumicyte was void and unenforceable. The company also sued Hutchens for breach of fiduciary duty to Ciphergen — where he served on the board until early 2000 — and alleging that he misappropriated trade secrets.

The judge has not yet set a trial date for this suit, according to both parties. But the outcome of this litigation could determine the fate of Lumicyte. If Lumicyte wins, it can continue to operate — and Ciphergen can continue its products-based business. But if Ciphergen wins, Lumicyte could at worst be driven out of business if it loses its license to SELDI.

Protein profiling services constitute only 15 percent of Ciphergen’s business, but according to Storella, this is “a significant part of the business.” And if Lumicyte weren’t there, Ciphergen’s services business might be even bigger.

From Lumicyte’s perspective, the service business is already exploding. “We are feeling a constant pull from pharma, biotechnology, and diagnostic companies — they are following us to our cars,” joked Hutchens.

Lawsuits aside, Hutchens envisions combining the protein maps generated using SELDI with genomic information in a database, along with clinical information, and offering the information package to customers. “This would allow us to formulate strategic approaches to diagnostics and treatment of disease,” he said.

— MMJ

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