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Michael McNeely, on Commercializing Microarray Products in Utah

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At A Glance

  • Michael McNeely, founder and chief technical officer, BioMicro Systems
  • BS — Electrical engineering, Cal Poly Pomona 1990
  • MS — Bioengineering, UC San Diego, 1991
  • PHD — Bioengineering, University of Utah, 1997

Michael McNeely founded BioMicro Systems in 1997 and serves as chief technical officer of the Salt Lake City-based company, which has just introduced a Microarray User Interface (MAUI) hybridization system for automating fluid processing of microarray slides.

When not working, McNeely can be found on his BMW motorcycle, skiing, rock-climbing or volunteering with the Salt Lake County Sheriff’s search and rescue team.

A Southern Californian, McNeely earned his PhD at the University of Utah, and then created a business around a microfluidics technology. Now, he finds himself, like other scientists who have birthed both a technology and a business, in a transition, serving as chief technologist for his firm and a traveling salesman/evangelist.

McNeely recently spoke with BioArray News about the company.

What’s it like to have a genomics tool company in Utah?

It’s very challenging. The high-tech history of the state focuses on software, with companies like Novell and WordPerfect located here. The real players for funding genomics tool companies are focused on companies on the East or the West coasts. A Utah company doesn’t get much attention from the VCs who don’t think anything good comes from this area. We are a captive audience for the VCs in Utah.

The state’s most significant [support] effort is to provide a fund of funds, a financial incentive to promote venture capital investment in Utah and focusing on the funding of new enterprises. There is another program to grow engineering at the University of Utah. And, we have Myriad Genetics, which was founded based on the thinking that the unique population of the state would provide good empirical data.

Why did you base the company in Utah?

The reason I did it here is because I enjoy the mountains and the lifestyle. The university had a microfluidics program and I thought I could hire people from that.

My background is in the core elements of microfluidics — microfabrication, fluid dynamics, molecular biology, biochemistry, protein immobilization, and life sciences studies. I was following the field of microfluidics when finishing my dissertation in microfabrication technology, and I had an idea of things that could be exploited. After finishing my graduate studies, I worked with Myriad Genetics as a consultant. They were using microarrays for high-throughput sequencing. I started on a project in 1997, using microfluidic DNA sample processing and we developed some novel techniques. We wanted to reduce the bottlenecks in sample processing and we came up with a product model that was meaningful to Myriad and companies like Myriad. We developed a DNA sample processing system that could be interfaced with currently existing hardware. That type of product — one that is disposable, plastic, and includes the steps important for sample processing and not the steps that don’t need to be — that’s the product model we have been working on.

In 1999, I began negotiating with Myriad to spin the technology off into BioMicro Systems. In 2000, we raised our first investor financing from angels, including two of the three founders of Myriad. Then, through their network, we raised $4.5 million in 2000, which was a great time to raise money for start-up companies.

What kind of intellectual property does the company own?

The more sound you are in IP the better, and that’s particularly true in microfluidics, where there is a history of patent contention. When we spun the technology off [from Myriad], we bought the rights and patents. We have two patents right now and 16 filed, of which one is issued, and five have been allowed — which means you negotiate with the patent [and] trademark office over the claims, and they say they will allow 50 or 55 claims, and you say OK.

What is your view of microfluidics and microarrays — or what some might call ‘Lab-on-a-chip’?

A lot of companies have different types of microfluidic technology, and all have some utility. You have Caliper, which uses electrokinetics, or electric fields, to move things around. Caliper’s electrokinetics are not good for bulk samples, while BioMicro is good for bulk samples, but not electrophoresis applications. Some applications need mechanical valves and others don’t need them at all. We would prefer to approach the sample processing side where there are a lot of inefficiencies; in the case of mass spec, creating a sample system that can interface with what is out there. Secondly, most companies already own those systems and have made a capital outlay for those systems. So, to save the customer the capital expense of buying [a] new detection system, we integrate into their systems. Myriad Genetics has lots of electrophoresis machines, there is no need to throw those out.

Who will use your product, and what will they use it for?

When we spun it off from Myriad, we thought about immunodiagnostics, nucleic acid amplification and diagnostics, and microarray sample processing. We decided that we should focus efforts on microarray sample-processing product applications. Now, that is [all] developed and commercialized. We did all the prototyping, in three different application areas, and launched [the product] for less than $5 million. We are now at the commercialization point. People who use MAUI are those who do a lot of work in microarrays, like universities, big pharma, and biotech.

We are a small company, with 10 people. We had more, but when we decided to focus on microarrays, we lost a few people. Our new CEO, Jim Kuo, was on the board for three years, [and] is an MD/MBA, and there are two PhDs, myself and one other individual.

What’s your work life like?

I travel a lot and I throw in a lot of sales calls and financing. I’ve been giving our investor presentation for three years. There are 35 slides, and it takes about 45 minutes to go through. I like it (sales). I carry some exhibits, the instrument or the MAUI cover slip. The first time I traveled with the instrument, I was concerned about [airport security]. But, nobody even looked at it — just another suitcase.

You recently traveled to Asia. What was it like to be in a SARS hotspot?

It was bizarre at the time. I traveled to Japan, Korea, Taiwan, and Singapore. They took your temperature in every building you went into, and on every plane. I was giving a presentation and there were 12 people in the room. We all had masks on — it’s hard to give a presentation wearing a mask. When it was done, we all ate lunch, taking off our masks. I took a voluntary 10-day quarantine when I returned. I think SARS risks are so overblown. But, I rock climb and I ride a motorcycle. I’m going back, but this time, I’m not going to go to any hospitals, which are places I would normally go, as we often talk to medical researchers at hospitals.

What is your impression of the Asian market for microarrays?

The focus of going to Asia is not necessarily for selling MAUI; that’s a side project. The primary reason is investment and manufacturing opportunities. In the US, the interest in microfluidics companies has waned precipitously. A couple of companies have not met expectations — some call them the high-throughput underachievers — and that’s fairly accurate. But in Asia, there is interest in a real product that they could use and [of which they could] be involved with the manufacture.

In Singapore, microarrays are pretty mature: You have the Genome Institute, with a lot of high-tech savvy researchers that are so competent and so on top of things. Conversely, other places are just starting to understand the value of microarrays. There is not a great user community in other parts of Asia, but that will be changing soon. In Taiwan, they are looking for new markets and new areas for manufacturing. Korea is interested in high-end applications while China is interested in the low-end. We have a development partner in Korea, and a distributor in Japan.

Will you stay with the company?

I think there are opportunities that can make this a significant entity and I feel an obligation to investors that have supported the company. MAUI is a good product and has a lot of potential.

 

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