The microarray industry is apparently hot for the micromirror-based in-situ synthesis technology that underlies the manufacturing techniques used by NimbleGen Systems of Madison, Wisc.; Xeotron of Houston, Texas; Light Biology of Dallas; and Febit of Mannheim, Germany.
Invitrogen has acquired Xeotron, a venture-capital-backed firm. The acquisition is the third this year for the Carlsbad, Calif.-based company, which purchased distressed BioReliance of Rockville, Md., for $403.2 million in February, and protein-array developer Protometrix of Branford, Conn., in April, for an undisclosed sum.
“It was an asset purchase, we acquired the technology,” Cheri Walker, Invitrogen’s vice president of corporate development, told BioArray News on Tuesday.
Walker said that the company has also hired key employees of Xeotron, but did not disclose how many employees were retained, or how much Invitrogen paid in the transaction.
Additionally, BioArray News has learned that NimbleGen Systems has been involved in talks with an industry player regarding the licensing of its technology, or the sale of an equity stake in the company, according to sources who spoke on the condition of confidentiality.
“Our policy is not to discuss potential strategic partnerships and deals, and that goes to any potential player in the industry,” Bob Palay, chairman of NimbleGen, told BioArray News. “Our technology has some active supporters and our business is growing, and our board and investors are very supportive of that.”
The Invitrogen-Xeotron deal is just the latest in what now appears to be a series of moves in the microarray sector that started with NimbleGen Systems’ March acquisition of Light Biology (see BAN 3/17/2004).
At the root of these moves is micromirror technology developed by Texas Instruments for use in projecting video as well as PowerPoint displays, which has been adopted by a number of microarray companies for use as a maskless photolithography system for the in-situ synthesis of microarrays.
“It’s a very synergistic product that applies in a lot of technologies we have,” Invitrogen’s Walker said.
In today’s marketplace, the micromirror technology is used to enable the rapid production of custom microarrays, addressing a perceived lack of flexibility in standard photolithographic semiconductor manufacturing techniques, such as the system pioneered by microarray industry leader Affymetrix, for the mass manufacture of microarrays. In Affymetrix’s system, masks are created to block light, which is used to catalyze chemical reactions to construct chains of nucleic acids at specific points on glass substrates. The design of masks is a technically complex procedure that requires expertise, lengthy periods of time, and additional investment.
The design of masks has been perceived as a gating factor for the production of custom GeneChip-brand microarrays so much that the Santa Clara, Calif.-based company, regarded as the leader in mass produced microarrays, in January (see BAN 1/14/2004) initiated a program to underwrite design services to entice business from large groups seeking novel plant and animal whole-genome microarrays.
The Xeotron purchase also points to a heating up of the market for lower density arrays, where companies like CombiMatrix of Mulkiteo, Wash., are just beginning to commercialize platforms and instruments for the benchtop production of custom microarrays. CombiMatrix, the life sciences unit of Acacia Research, is expected to roll out a 13,000-probe customizable chip early this summer.
Xeotron was founded by Xiaochuan Zhou, a research scientist at the University of Michigan; Erdogan Gulari, a chemical engineering professor at Michigan; and Xiaolian Gao, a professor of biophysical and bio-organic chemistry at the University of Houston. Xeotron operated on exclusive licenses from the University of Michigan and the University of Houston where key elements of the technology were developed by Xeotron’s two founders.
Initially funded by various government and research foundation grants, Xeotron secured $9 million in venture capital in a series A round in 2001 that included Vanguard Venture Partners, Fremont Ventures, and others. In 2002, the company announced a $3 million DARPA grant to develop an array-based oligonucleotide synthesis system to assemble up to 10,000 base pairs of DNA within 24 hours.
The company tapped Timothy McGrath, who was president of Sigma-Genosys, to become its chief executive officer in October 2002.
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.
NimbleGen occupies a unique niche in the microarray industry. The company does not sell microarrays per se, but operates on a services basis, with its analysis performed at labs in Iceland, where it is sheltered from intellectual property litigation risks. The company was among the first to create a whole-human-genome single-chip microarray, offering it as a service to customers before the industry giants were able to market catalog products.
The company is venture-capital backed to the tune of $32 million in four rounds. The company’ backers include Germany’s Schott Nexterion, 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.
GE Healthcare, which sells the CodeLink microarray line, declined comment, as did Agilent Technologies, which sells a line of microarrays based on an ink-jet manufacturing process.
In 1999, Affymetrix acquired Genetic MicroSystems of Woburn, Mass., for $101.1 million in stock, which was then trading at well over $100 a share. The company issued approximately 4 percent of its outstanding common stock for GMS, which was manufacturing microarrayers and related analysis instruments.
At the time, the company had an installed base of 200 systems and Stanley Rose, who is now the president and chief executive officer of NimbleGen Systems, was the vice president and chief operating officer of GMS. After the sale, Rose joined Affymetrix as a fellow.
With the purchase of GMS and its line of tools, Affymetrix was seeking to offer an arraying platform to complement its high-end chip products.
As to NimbleGen’s desktop chip-making technology, which is referred to as “Maskless Array Synthesis” Richard Rava, then senior vice president and chief technology officer of Affymetrix, told the publication EE Times: “Been there, done that.
“We believe that the standard semiconductor manufacturing technologies provide a scalable process for making large numbers of high-quality arrays,” Rava said. “Micromirrors and other technologies for manufacturing GeneChip arrays may have niche applications for creating small numbers of custom arrays, but researchers who wish to have the flexibility to make a small number of arrays don’t need to make chips. They can use tools like those we agreed to acquire from Genetic MicroSystems.”