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Nanosphere s Vijaya Vasista on Commercializing Verigene Platform

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At A Glance

Vijaya ‘VJ’ Vasista, Chief Operating Officer, Nanosphere

Education:

1988 — MBA, University of Chicago.
1983 — BS, Economics, University of Pennyslvania

Work Experience:

2000-present — Chief operating officer, Nanosphere.
1998-2000 — Vice president, global marketing, Baxter Healthcare.
1984 -1997 — Baxter Healthcare.

 

Vijaya “VJ” Vasista has been the chief operating officer of Northbrook, Ill.-based Nanosphere for just over three years now, taking the lead role in commercializing a technology based on inventions by Chad Mirkin and Robert Letsinger of Northwestern University.

The company, which is projecting the launch of its Verigene microarray technology at the end of the year, has gathered some $24 million of investment to date: $9 million in the first two rounds of financing and $15 million in the third round, which was completed in December 2002.

Additionally, Nanosphere has raised capital for development of its technology through a variety of small business innovation research grants, and by government contracts, including a $2.5 million contract announced in February with the Chemical, Biological, Radiological and Nuclear Countermeasures subgroup of the US Government Technical Support Working Group, to develop a field-deployable detection technology for the identification of biological toxins.

The company’s core technology uses electrical conductivity measurements facilitated by gold nanoparticle probes. These probes are comprised of complementary DNA sequences attached through a proprietary modification to the gold particles, which have a diameter of approximately 13 nanometers. The company’s ClearRead assays enable the detection of genomic DNA, RNA or protein sequences without PCR amplification.

BioArray News spoke with Vasista to learn about the progress of the company.

When did you first get involved in this technology?

I first got involved about three and a half years ago in 2000. I had the opportunity to meet the founders of Nanosphere, Dr. Mirkin and Dr. Letsinger, both of Northwestern University. They were establshing Nanosphere, they had just incorporated in 2000 and had gotten their first round of money from a venture capital firm and were looking for someone to come in and establish the business. I had spent my entire career at Baxter Healthcare, so my experience was exclusively in the medical products arena and clearly, that is the application that we are pursuing here at Nanosphere is a molecular diagnostic platform using what we call the Clear Read technology that was started by Dr. Mirkin and Letsinger.

What convinced you to leave a comfortable, well-established position for a startup?

First of all, it was very compelling science. It was very clear to me that this was in a high-growth area of the molecular diagnostic arena. The technology looks very robust, and one that could make molecular diagnostics far more broadly applicable so that you didn’t have the kind of things that you do today with only a few specialized labs being able to run these tests, that require specialized labor -- sophisticated technologists as well as PhDs and MDs -- to actually run these tests and interpret the results. A platform like [ours] could make it a very robust technology and could broaden the ability to use it into many healthcare environments, not just the specialized laboratories.

You have one product that launched in 2003?

That’s right, that’s the Verigene 90 imaging system, which is used for research applications only. It images microarrays using the nanogold particles to interpret results for people who are doing nanoparticle research.

Do you have a number for your installed base?

Basically, we are selling to a few specialized places. The real launch of the Verigene system will happen at the end of this year, which we think will be far more broadly applicable and will actually be used in clinical environments as well.

If I have counted correctly, Nanosphere has received at least five patents since January.

We have received an awful lot. We are now up to 25 US patents issued and allowed and one foreign patent. We are waiting for some of those to come out of the patent office.

Many of your patents share the same name. Why?

The primary patent that was originally filed by Northwestern by Dr. Letsinger and Dr. Mirkin needed to be divided into several smaller patents because it was way too big for the patent office to examine. That is why we are getting all those through the system.

Are these your core patents and do they allow you to move forward into commercialization?

They are the core patents for the chemistry; and they involve the functionalization to create the DNA probes. We are actually in a very good position for the first products that we will be commercializing. But there are still more [patents] to issue. We have probably almost 100 still pending on a worldwide basis, not only involving the chemistry but the instrumentation [as well].

What is the price point that you think will be competitive in the market and get people’s attention.

In diagnostics, it really is a system cost issue, and the system cost needs to take into account not just the cost of the instrument, but the cost of running each assay, as well as the level skill required to run that assay. I think we will compare very favorably on each and every front in terms of the hardware cost, the assay cost, and the simplicity with which we can run the assay. Our first multi-center customer evaluation was run at the end of last year. One of the hallmarks that our customer talked about very consistently was the simplicity of the system, and that was even when it was a manual assay, so there were pipetting steps involved. Now that we will be automating that, you will see the simplicity factor even increase beyond where it was.

What are the metrics that people can use to make a purchasing decision?

It will vary by assay because we offer different capabilities by assay. When we launch at the end of the year, we will have three assays and some multiplexing capabilities available. We also will have a series of assays that are for our government contract, [and] some of those might be leverageable into the clinical community. The total number of assays that we will have developed by the end of the year will number about 15 — some for the government market and some for the clinical market.

So the costs for hardware, assays, and labor, are …

Most automated instruments that require a minimal amount of customer intervention range anywhere from $50,000 to $100,000. We are going to be at the very low end of that price range for the Verigene system. And then, for the assay cost, you will see on a per-result basis, you see anywhere, I would say, and again it is very dependent on the assay itself — anywhere from $25 to hundreds of dollars depending on the target of interest. We will be at the lower end of that range too, again depending on the assay. It’s very hard to generalize.

And labor?

There are a couple of things to bear in mind with lab technicians; there is an extreme shortage of lab technicians, and certainly the ones that are sophisticated enough to work in the molecular arena. There is a huge shortage of these highly skilled people. What we are talking about is something that the average lab tech could run very simply in our system, and that has been proven time and again by the customer evaluations that we have done. One of the other hallmarks of this system is that the results that are reported off the microarray do not require interpretation. You can make a very clear call as to the test result, versus in some of the systems you have melt curves and those sorts of things that require interpretation.

When you go into the clinic, what is going to go into your system?

They are going to put in a sample of DNA from a patient. That will go into a hybridization cartridge. That goes into the fluid processing unit of the Verigene system, which will run the assay. After that is complete, generally in about 30 minutes, again, depending on the target of interest, you remove the hybridization chamber and put it into the Verigene ID and read the results, and that is it.

What do you see?

You see spots. It is all read on the gray scale.

Is the funding you have received all that is necessary to go to market?

We will be raising another round [of venture capital] shortly. We also have our government contracts. Those are funded development contracts which are very wonderful for us because what we are developing for the government is also essentially the system required for the clinical marketplace.

That kind of developmental funding has also allowed the equity in the company not to be quite as diluted.

Yes, that’s right. With these funded development contracts, you are reimbursed for the work you can do. And, if you meet milestones, contracts can be extended. It continues to move forward.

How many employees do you currently have?

We have 55 employees and we also use some contractors here for specific areas of need, for a given time. And, as we complete a portion of project, we can move on and use contracted help very effectively in that regard.

Dr. Mirkin is quite a prolific scientist, with two companies spinning off his research findings: There is Nanosphere, which is you all, and Nanoink. It’s hard to keep it straight.

I think of Nanoink more of a tool in the nanoscale space, I believe. I don’t associate with them on a regular basis.

So in terms of the inventors of the technology, the firm has now moved into a more commercialization-targeted space?

We continue to have Bob and Chad on our scientific advisory board and, in fact, Chad Mirkin is on the board of directors. They are very valuable on a host of levels. Bob is retired from Northwestern, but he is a legend in DNA chemistry and he continues to be very, very helpful on the advisory board in terms of patent prosecution and those sorts of things, and he continues to be involved in that regard. We have an IP relationship with Northwestern and Dr. Merkin, whereby inventions [that are] added on the fundamental chemistry, we have a right of first refusal as to whether or not we would like to pursue that. So, with nanoparticle diagnostics, we have a very close working relationship with Dr. Mirkin and Northwestern. Though they continue to be involved, we are very much the company that is trying to make it.

How do you see the regulatory environment ahead?

One of the things that we developed here at Nanosphere is a team that is very well-versed on regulatory issues — certainly at the management levels — not just in the US, but on a worldwide basis. Most of the leadership here has worked on regulated products for all their careers.

We are not interested in discovering content at all. That is where the high-density microarrays are being used successfully, and have been for a long time. We are interested in those markers that have already been clinically validated, and are being tested for on a more routine basis already. We are not trying to create new markers but [are] enabling testing of markers that are established. There is an awful lot and certainly all the infectious disease targets are all well characterized. Using molecular methods to detect infectious disease has been around for quite some time; and certainly, in a lot of ways, they are a whole lot faster than traditional microbiology methods. In terms of genetic analysis, there is an awful lot as well, everything from cystic fibrosis to hypercoagulation disorders: There are many genetic markets, and many more are being discovered all the time. And of course, cancer is another arena.

This is a very fluid environment for developing and commercializing a technology.

I think having experience and working with the regulatory organizations and working collaboratively is the way to move forward and that is certainly what we at Nanosphere intend to do.

We have had some informal meetings with the FDA at this point, and we look forward to really engaging with them. There are a few things we need to do here at Nanosphere and one of them is to create a CGMP environment. We just moved into our new facility here at the end of last year. While most of our platform is manufactured outside of Nanosphere, the probes will always be manufactured here. So those are some things we need to get in order before we sit down formally with the FDA, but I don’t believe that is going to be an issue.

Your probes, the gold particles with oligonucleotides attached, are these an alternative revenue source?

I don’t know anyone who is doing that very profitably. I think we would like to focus on our core, which is creating an integrated system of assays.

In five years, where will this be?

In five years, I absolutely see reference labs using them, but definitely molecular diagnostics labs — there are about 300 in the US and about the same number in Europe. And, also, I can see them being used in traditional clinical labs in hospitals for certain areas.

What does it look like? Is it handheld?

It could well be. Certainly it will be an integrated unit that will also be usable in a doctor’s office for those kinds of tests where you need a quick turnaround time.

And the government platform?

The government platform would definitely [be miniaturized], at least in one application. But, what they consider portable and what you and I consider portable is different. I know they would like a handheld unit. But portable for them means four Marines can take it off the back of the truck and carry it. We are certainly beyond that stage.

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