Skip to main content
Premium Trial:

Request an Annual Quote

Reproductive Health Science Raises $3M, Goes Public as Array-based PGS Test Nears Launch

Premium

Australian biotechnology company Reproductive Health Science has raised A$3 million ($2.8 million) as part of a reverse merger with AO Energy, a publicly traded mining company.

Adelaide-based RHS is developing a test that relies on microarrays to assess embryos for chromosomal abnormalities prior to implantation as part of an in vitro fertilization cycle. Through offering an array-based tool for pre-implantation genetic screening, the company aims to raise IVF success rates, which currently hover at around 20 percent. RHS' test will also provide IVF clinics with an alternative to BlueGnome's 24sure array-based PGS offering.

RHS' deal with AO Energy, which closed on April 2, has allowed it to raise the funds that will support the introduction of the new test in Australia later this year, according to CEO Michelle Fraser.

Fraser told BioArray News that the company has been developing its PGS test since 2004, and is now ready to launch the assay. The A$3 million in funds, plus an additional A$500,000 gained through the business combination with AO Energy, will allow it to expand its executive sales team so that it has the expertise to carry out the launch properly, she said.

"The investment is not for R&D purposes, it's for a product launch," said Fraser. "We are not talking about another five years readying the product; we are getting it out there now."

Fraser noted that while the company's reverse merger with an energy company might raise some eyebrows outside of Australia, AO Energy's investors viewed the move intro reproductive health favorably. "With mining going not so well on the market, biotech becomes the next pick for those people because they see it as a similar risk profile," she said.

The resulting company, which will retain RHS' name, will be relisted on the Australian Securities Exchange on April 22, Fraser said. She added that the company does not need additional capital at the moment, and believes its recently raised funds are sufficient to see it through profitability within the next three years.

PGS uptake

RHS was founded in 2003 to commercialize technology developed within the University of Adelaide's department of obstetrics and gynecology. Over the past decade, the firm has raised A$5.7 million in investments and grants to develop its IVF screening approach. And while the reproductive health market has seen increased interest in the past few years, especially with Illumina's dual acquisitions of BlueGnome and Verinata Health, Fraser said that RHS has always been focused on PGD.

"There was talk at the start of the company about going into the prenatal space as well, but that has changed so much in the past few years that the focus has remained on going into the IVF industry," said Fraser.

There is also the incentive of rapid growth. According to RHS' estimates, the global IVF market is expected to grow by 10 percent annually, from 1.7 million IVF cycles in 2013 to 3 million cycles in 2019. At the same time, the extent of PGS cycles is set to expand from 51,000 tests run in 2013, or 3 percent of the IVF market, to roughly 600,000 PGS cycles in 2019, or 20 percent of that total. Given that there are four tests run per cycle, RHS anticipates the number of PGS tests to rise from 204,000 per year in 2013 to 2.4 million per year in 2019.

And those estimates are actually conservative, according to Fraser. "The IVF industry in Australia is experiencing over 11 percent growth," she said. "As far as the growth in the PGS uptake, we have seen clinics going from 0 percent to 25 percent of patients within 12 months."

While those figures have no doubt captured investors' attention, RHS has another compelling reason for entering the IVF market: its technology. The company has developed its own method for whole-genome amplification of DNA obtained from single cells, and will launch a WGA kit to complement its microarray as part of its PGS offering.

"We have always been focused on limited amounts of starting material, a few cells or single cells and so that suits very well within the IVF industry," said Fraser.

In line with the development of its WGA approach, RHS partnered last year with Kapa Biosystems, a next-generation PCR reagents company with offices in Boston and Cape Town, South Africa. Fraser said that the two companies intend to launch kits for WGA, fluorescent labeling, and single-cell sequencing later this year.

Along with its own WGA method, RHS also manufactures its own microarrays, which Fraser said should allow the company to reduce the cost of its overall PGS offering, though she declined to comment of pricing.

RHS's array manufacturing begins with the dissection of individual human chromosomes out of metaphase spread. Those chromosomes are then amplified using its internally developed method, producing a PCR amplicon library of sequences for each chromosome that is printed onto a standard microarray slide. Each spot on the array contains about 1.2 million sequences per chromosome, Fraser said, with each chromosome represented by a single spot.

"The advantage in being able to do it that way is that you've got lots of targets for the CGH step, so you can overcome amplification differences between your test and your reference," said Fraser. She added that RHS's microarray does not require complex bioinformatics, another potential advantage for the firm in winning over new customers.

"And all you are doing is measuring the genetic dosage of that chromosome," said Fraser. "We have got lots of targets for each chromosome, and it all gets combined into a single readout into the microarray," she said. "It's a PCR library, amplicons from the chromosome, and it's very different from anything that is out there."

According to Fraser, RHS is in the midst of packaging and labeling its product ahead of its launch later this year. She said that Australia would be the firm's initial market. "We want to work closely with a few local IVF clinics to make sure it works well in their hands," she said. "There are quite a few Australian clinics that are familiar with array CGH." Beyond Australia, the firm will work with contacts in the PGS space around the world to see its test adopted and implemented.

"We are not particular as to which territories we go through first," said Fraser. "It's a matter of getting the product out there."

IVF and NGS

A next-generation sequencing-based version of RHS' PGS test should also become available later this year, following the launch of the array-based offering.

Fraser said that the company is "very aware of the interest in next-generation sequencing, particular for single cells" and has observed a lot of debate among those performing PGS as to whether sequencing is the right approach or not.

At the moment, it appears that the array-based approach may be more popular, given its turnaround time, plus the more limited results it provides.

"Our array is designed to detect aneuploidy, which is the key question people want to answer," said Fraser. "They want to get a quick answer, a lower failure rate, and a lower ethical risk of getting too much information, and we think that's well suited to an array," she said. "Still, we are aware that some labs will prefer to do NGS," Fraser added.

She noted that Kapa Biosystems has already established a presence in the next-generation sequencing market as a provider of PCR libraries. RHS therefore sees its relationship with Kapa as a "strong opportunity" to enter that market.

"We want to have all bases covered," said Fraser. "Seeing as we have our own WGA approach, it makes sense for us to also be able to use that in a sequencing platform, not just on a microarray."

RHS is also in discussions with potential distributors that might help it reach more clients around the world. She described these would-be partners as diverse, noting that some already supply tests to IVF clinics and would like to broaden their offerings, while others provide genetic tests and would like to get into the IVF market.

"This is a very interesting market segment to a whole range of different people," said Fraser.

While RHS prepares to enter the PGS market, Illumina is planning upgrades for its PGS offerings. In addition to launching a new CytoSNP Karyomapping product for array-based PGS, the company also plans to debut a complementary next-generation sequencing based assay called VeriSeq for PGS later this year.

The Scan

Shape of Them All

According to BBC News, researchers have developed a protein structure database that includes much of the human proteome.

For Flu and More

The Wall Street Journal reports that several vaccine developers are working on mRNA-based vaccines for influenza.

To Boost Women

China's Ministry of Science and Technology aims to boost the number of female researchers through a new policy, reports the South China Morning Post.

Science Papers Describe Approach to Predict Chemotherapeutic Response, Role of Transcriptional Noise

In Science this week: neural network to predict chemotherapeutic response in cancer patients, and more.