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Invitrogen’s Acquisition of U of Houston Startup VisiGen Pays Dividends for School

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VisiGen Biotechnologies, a University of Houston gene-sequencing outfit acquired by Invitrogen in October for $20 million, represents the university’s biggest return on a spinout to date, and could eventually become one of its biggest overall tech-transfer wins, the school said last week.
 
As a result of VisiGen’s acquisition, UH, which held an undisclosed equity stake in the startup, will receive nearly $500,000 from the initial installment of the deal. Plans for follow-on installments were not disclosed. An indirect benefit comes from the fact that approximately half of VisiGen’s current employees are UH graduates, the school said.
 
Several of the scientists that founded the company will now continue to research second-generation sequencing techniques in their UH laboratories. Whether this research eventually sparks additional collaborations between VisiGen and the university is now up to Life Technologies, the biotech tool giant that resulted from Invitrogen’s multi-billion-dollar merger with Applied Biosystems last month.
 
UH no longer maintains any formal ties with VisiGen or Life, though an informal connection could facilitate such collaborations: VisiGen co-founder and former president and CEO Susan Hardin, who will remain with the company as a research director, is a former biology and biochemistry professor at UH.
 
In addition, while VisiGen co-founders James Briggs, Xiaolin Gao, Michael Rea, Shiao-Chun Tu, and Richard Willson have severed their ties to the company in the wake of the acquisition, they “will continue working on the development of technologies that will spur new discoveries, additional patents, and possibly new spin-off companies,” UH said in a statement.
 
For their part, the five scientists would welcome continued collaboration with VisiGen and Life, Briggs, a UH associate professor of biology and biochemistry, told BTW this week.
 
“There is an interest from the co-founders at the university” in future collaborative research projects, Briggs said. VisiGen “knows we’re interested, but that will ultimately be a business decision on their part.”
 
It is unclear whether Life Technologies would entertain such partnerships. Life is still identifying how VisiGen and other pieces of Invitrogen and ABI will fit together.
 
A Life spokesperson wrote in an e-mail to BTW this week that the company is not commenting on the VisiGen acquisition beyond what Invitrogen said during a company earnings call in October.
 
In that call, CEO Greg Lucier said the firm sought to acquire VisiGen in order to obtain its intellectual property, BTW sister publication In Sequence reported. “This acquisition, although small in nature, significantly enhances our intellectual property portfolio in this important area” and “complements our own work and increases our confidence that we will be the leader in the new genomics era unfolding before us,” Lucier said at the time.
 

“Universities are typically conservative and look for licensors for their technologies … but this was a risk that UH took, and hopefully it will pay off.”

Lucier also cited VisiGen’s strength in some areas of enzymology and other fields, which “complement the large and growing team we have in single-molecule sequencing development.”
 
VisiGen, which was founded in 2000 and is one of UH’s earliest spinouts, holds two US patents. The first, No. 7,211,414, entitled “Enzymatic nucleic acid synthesis: compositions and methods for altering monomer incorporation fidelity,” was granted in May 2007 and covers the use of labeled nucleotide triphosphates in sequencing and other assays.
 
The second, No. 7,329,492, entitled “Methods for real-time single-molecule sequence determination,” was granted in February and discloses a sequencing method that involves engineering a polymerase or deoxy nucleotide triphosphates with detectable tags.
 
VisiGen also has seven published US patent applications that include methods for inhibiting pyrophosphorolysis; ways for analyzing and classifying single-molecule Förster resonance energy-transfer, or FRET, events; surfaces for observing single molecules and preventing fluorescent labels from photo-bleaching; modified nucleotides; and an apparatus for automated single-molecule sequencing using FRET.
 
The company developed much of this IP since being spun out of UH. VisiGen’s ultimate goal was to turn the scientific discoveries of its co-founders into a marketable method for sequencing entire genomes as quickly and cheaply as possible.
 
Briggs said that “a goal for VisiGgen and a goal for the industry” continues to be creating a platform that can sequence a human genome de novo in less than 24 hours and for under $1,000.
 
The company was able to achieve a proof of concept for its sequencing method in part because UH supported creating the startup rather than seeking support from or licensing deals with industry players, which would likely not have added as much value to the company’s IP, said Briggs.
 
“VisiGen was spun out with the purpose of developing this technology,” Briggs said. “That was the main goal, but obviously along the way other things were discovered. Universities are typically conservative and look for licensors for their technologies … but this was a risk that UH took, and hopefully it will pay off.”
 
So far it has paid off to the tune of approximately half a million dollars, which UH said represents one of the largest payoffs from a single spinout in the school’s history.
 
Emmanuelle Schuler, director of the UH Center for Industrial Partnerships, told BTW that VisiGen is also one of UH’s earliest spinouts. The school has spun out approximately 11 companies since VisiGen was founded in 2000.
 
UH may be poised to reap additional financial gains from Inivtrogen’s buy of VisiGen, as the school said in a statement that the $500,000 represented its “initial installment” from the deal, though plans for follow-on installments were not disclosed.
 
“To have something like this get its start at UH is remarkable,” John Bear, dean of the UH College of Natural Sciences and Mathematics, said in a statement. “A collateral benefit of this spinoff to our university is that it provided a place for the training and employment of our graduates.”

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