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NimbleGen to Invest $8.2M VC Infusion in Manufacturing, Software, Service, New Apps

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Emerging from a round of private-equity fundraising that netted $8.2 million, NimbleGen officials said this week that they plan to direct the new funding to solidify production capacity for existing applications, expand customer service, build software analysis capabilities, and invest in new technologies.

"We intend to invest broadly across the organization, with particular emphasis on expanding production capacity and customer support to address the rapid growth in demand for our three new product lines," NimbleGen CEO Stan Rose told BioArray News via e-mail this week.

Rose predicted that growth in NimbleGen's three new product lines array comparative genomic hybridization applications, chromatin immunoprecipitation (ChIP)-on-chip technology, and its comparative genome sequencing methodology would make next year a "real break-out year" for his six-year-old company that would enable it to rise to the "next level of commercial success." NimbleGen debuted the three applications in March (see BAN 2/23/2005).



"We intend to invest broadly across the organization, with particular emphasis on expanding production capacity and customer support to address the rapid growth in demand for our three new product lines."

Key to that potential will be the new funding. The round was led by Cargill Ventures and Skyline Ventures. Topspin Partners, Tactics II Investments, Venture Investors, Baird Venture Partners, the Wisconsin Alumni Research Foundation, and the State of Wisconsin Investment Board also participated in the round. Each has invested in the company in the past, and NimbleGen said the latest round brought the total investment in the privately held company since inception to $50 million.

Dan Clutter, the firm's VP of business development, told BioArray News last week via e-mail that investments would also continue to be made in manufacturing to deal with increased demand.

"In 2005, our orders more than tripled and revenues more than doubled over 2004," he said. "Our [Icelandic] production facility moved to a facility that is six times larger [and] our production staff increased two-fold."

Clutter said that the funding "will be used for many things, [including] funding our current and continuing expansion plans for people and equipment, [and] beefing up [NimbleGen's] internal resources for marketing, sales, admin, and product development."

He also said that NimbleGen would continue to push its core technology isothermal oligos and high feature density into newer applications, which CEO Stan Rose named as including expression tiling, allele-specific expression analysis, and genome-wide DNA methylation analysis. Clutter also named splice variant arrays as a technology in development.

"We will continue to push the core instrument technology so that we can extend our lead in our current and future product lines," Clutter said. He said the NimbleGen ideal will be "an array with over 4 million features that uses long isothermal oligonucleotides between 45 mers and 85 mers in length."

He also said that by December 2006 the exon-level resolution the company claims it can achieve with its CGH application will be available for "the entire human and mouse genomes … for ChIP-on-chip, CGH, expression tiling, et cetera." Clutter said that progress in the company's core technology would ultimately bring down the cost of its different applications.

ChIP-on-chip

Sanjiv Arora, the NimbleGen director at Cargill Ventures, specifically named NimbleGen's ChIP-on-chip and array CGH applications as the company's strengths in last week's statement, singling out NimbleGen as "the ChIP-chip market leader."

Arora did not return an e-mail seeking comment further details on the company's market position by press time, but Rose estimated that "more than 75 percent of the labs performing ChIP-chip today are working with [NimbleGen's] platform."

Rose added that NimbleGen believes that "ChIP-chip analysis will grow to become a mainstream genomic analysis application, with a potential market that will exceed $100 million annually."

"We're still in the early growth phase of market development, with the majority of work being done by academic thought leaders. The most notable use of the technology is in conjunction with the NIH ENCODE project, where roughly a dozen major groups are using ChIP-chip to study transcription factors, promoters and other elements that control gene expression," he said.

The company also received a $1.7-million, four-year grant from the National Cancer Institute in October to map transcription factor binding sites throughout the human genome (see BAN 10/19/2005).

Roland Green, NimbleGen's vice president of R&D and chief technology officer, told BioArray News at the time that the company planned to streamline the technologies developed with the NCI into TF-specific arrays. He said NimbleGen plans to reduce the cost of ChIP-on-chip experiments further "through the development of additional array-reuse protocols and three- and four-color hybridizations" and "to increase by threefold the number of samples that can be studied on a single microarray as well as reduce experimental costs."

Rose said last week that NimbleGen's rivals in the ChIP-on-chip market would most likely include microarray market leaders Affymetrix and Agilent Technologies. He said that NimbleGen sees its competitive edge in its paring of long oligos and high density in the application.

Pushing CGH, GCS, and the Core Technology

While ChIP-on-chip appears to be a leading NimbleGen application, Rose said that there would be investments made in customer service and informatics for CGH and GCS, which he said enables microbial comparative whole genome sequencing.

"For all of these applications we're investing in developing analytical software and providing technical support to ensure customers can get the most out of their data," Rose said.

— Justin Petrone ([email protected])