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'Restart' Protein-Array Shop Plexera Targets Pharma R&D in US, China

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By Justin Petrone

Seeking to cash in on increased demand by pharmaceutical researchers in the US and China for next-generation protein-analysis tools, Plexera recently began selling its surface-plasmon-resonance PlexArray System to early-access customers in those countries.

The 1-year-old, rebuilt company, which has operations in Woodinville, Wash., and Beijing, also plans to formally debut the tool in the US and China, according to its president.

Jay Smith told BioArray News week that Plexera is working with first adopters to tweak the PlexArray System for broader commercialization. The system, based on Plexera's Kx5 array technology, uses the company's SPR-analysis technology to measure thousands of protein reactions on a gold-layered surface.

"I would say we are in between early access and being fully commercial right now," Smith said of the system. Once the company addresses remaining "minor ... form and fit" issues, it will intensify its efforts to market the system to pharma and biotech researchers that will use it in antibody screening and discovery work. These indications represent Plexera's first target applications.

Smith said the company believes that its high-density array platform will stand out in a market where rival SPR systems, including those made by Biacore, Bio-Rad Laboratories, and GWC Technologies, typically run relatively lower-throughput assays.

"Most other companies offer one target at a time," Smith said. "We can do a couple thousand reactions in a run, while they are doing four or sixteen."

Plexera was founded in February 2009 to commercialize the assets of Plexera Bioscience, a subsidiary of Bothell, Wash.-based Lumera, a high-speed telecommunications company. Plexera Bioscience was shuttered in April 2008 after Lumera merged with electro-optics firm GigOptix (BAN 4/1/2008).

Smith, who was formerly director of sales and marketing at Plexera Bioscience, joined five private investors to acquire the subsidiary's assets.

For an undisclosed sum, they bought "all [of Plexera Bioscience's] hard assets, capital equipment, all the tools, all the engineering, including all the IP," with a plan to market the technology.

Under Lumera, Plexera was approaching a full commercial launch of the Plexera Kx5 system, and had placed early-access versions at labs at the Medical University of South Carolina, Harvard Medical School, Baylor Institute of Immunology in Houston, and the Institute for Systems Biology in Seattle.

But once Lumera decided to focus its business on the high-speed telecommunications market, the firm killed the Plexera subsidiary when it merged with GigOptix.

"They had to figure out how to derive value out of Plexera while they were seeking funds and partners," said Smith. "The synergies weren't there."

For Smith and fellow investors, though, Plexera's assets had enough value to embolden them to create a new company.

"Lumera had invested nearly $20 million into the development of the platform, IP, engineering, research, and quality-control systems," Smith noted. "It was getting fairly close to the commercial stage at that point and there was a ton of value there."

"The amount of investment to bring that value to market and get a pretty significant valuation was very low compared to a startup company, so I consider us a restart as opposed to a startup;" he added.

According to Smith, Plexera was also able to retain some "key personnel" with the know-how to continue the firm's platform-development operations. In addition, a number of the company's founding members are originally from China, which has enabled the company to open Plexera China. The full-time facility, based in Beijing, performs software and mechanical engineering, applications, and marketing for the firm.

"There is a significant push from the Chinese government for pharmaceutical development within China," said Smith. "There are huge business parks dedicated to R&D in pharma and biologics.

"We felt that since it was an emerging market and we could consider ourselves local, we had a strong competitive advantage in the marketplace," he added. "That market is interested in our type of platform and we felt we could have a strong presence there."

Plexera China has also proved a "significant input and development" resource for the company. The China office has developed Plexera's next-generation software-analysis tool, which is based on Labview, the "format of choice for diagnostics and pharma research instruments," Smith noted.

Plexera China also has expertise in optics, electrical engineering, and mechanical engineering, he said. And Plexera has been able to reduce its system costs by building a network of supply vendors that provide "essential, high-labor components" for its PlexArray instrument. Smith declined to discuss the current price of the PlexArray system.

As other expatriate manufacturers have found, China can become a source of revenue. Smith said that Plexera was recently notified that it will receive a "multimillion dollar" grant from the Chinese government intended to support operations and international collaborations.

That will help the firm to continue its operations, which were funded through initial seed financing in its first year of operations. This year it is surviving on revenues, having recorded $500,000 in the first six months from sales of systems and consumables to early-access customers, which largely comprise previous users of Plexera products.

"There were five alpha-beta units out there with collaborators before we acquired the assets and one of the first things I did was reestablish relationships with those customers," Smith said. "Even after a year and a half of no support, those systems were up and running and people were publishing again."

The firm currently lists on its website MUSC, the ISB, Baylor, and Arizona State University as partners.

One continuous customer has been Joshua Labaer, who last year became director of ASU's Biodesign Institute. Labaer, formerly of Harvard's Institute of Proteomics, has been using the Plexera technology as a basis for his nucleic acid programmable protein array platform for years (BAN 11/14/2006).

Plexera prefers to rely on revenues and not seek additional financing until the capital markets improve, Smith said. "Our intent was to keep our equity position in the company as it was originally until such time as we can get our valuation up and get investors without losing a huge portion of equity," he said. "We feel that, coming out of 2010, our valuation will be much, much higher."

Looking forward, Smith called Plexera a "healthy prospect," fueled by new business relationships in China and existing relationships with US customers. He also said the firm has had discussions with customers in Europe and elsewhere in Asia Pacific and that there is "worldwide interest" in the system.

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