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URMC Wins Key US Patent to Enable Spinout Lighthouse Biosciences to Develop Dx Platform

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The University of Rochester Medical Center has been awarded a US patent that will allow a 2005 biotech spinout of the university to continue developing a DNA-based pathogen-detection technology, URMC said last week.

The spinout, Lighthouse Biosciences, will initially use the technology to develop point-of-care diagnostic chips for detecting hospital-acquired infections, although it may also eventually use the technology for other healthcare, agricultural, food safety, water quality, and defense applications, the company said.

With the key patent in hand, Lighthouse will also turn its attention to seeking additional private investment to develop its detection platform, company officials said this week.

The recently awarded patent, US No. 7,442,510, entitled "Method of identifying hairpin DNA probes by partial fold analysis," is crucial because it gives Lighthouse freedom to operate in the area of developing the DNA probes for a diagnostic lab-on-chip device, Lighthouse co-founder and URMC researcher Benjamin Miller told BTW this week.

"This is a huge milestone, because it covers our methodology for content," Miller said. "If you think about diagnostic devices, one major component is the chip itself, and the other major part is the content on the chip. This patent is about how we go about generating the content for these chips."

Lighthouse' CEO Rand Henke added that the patent is part of a portfolio of intellectual property that the company has exclusively licensed from URMC and which forms the foundation for Lighthouse's NanoLantern probes. "These are unique hairpin probes that let us put a highly sensitive probe on an array," Henke said. "It is label free. The target DNA doesn't have to be manipulated."

Henke added that the new patent gives Lighthouse "some advantages with quality control and cost" in producing the probes.

Another patent application owned by URMC and licensed to Lighthouse, entitled "Hybridization-based biosensor containing hairpin probes and use thereof," is currently under review by the USPTO.

The most recent USPTO action on the patent is a non-final rejection, issued in October of last year. However, according to Henke, the judgment is part of the "normal course of action" in patent prosecution. "We have responded to it through the [URMC tech-transfer office] and believe we are in good shape," Henke said.

Lighthouse was founded in 2005 by UR faculty members Mille, fellow URMC researcher Todd Krauss, and Christopher Strohsahl, who was a PhD student in Miller's lab at the time. The researchers founded the company along with the URMC OTT to commercialize their research on using hairpin DNA probes to identify unique genetic sequences from biological samples.

According to Miller, the crux of the technology is a computational method for determining stretches of DNA from various organisms that provide a unique signature for identifying that organism with complementary nucleic acid probes.

"You can go to any database and get the entire sequence of E. coli," Miller told BTW this week. "But how do you pick out, from that sea of genetic information, the part that will be used for the diagnostic portion? It's a series of computational steps – we take the raw sequence information, convert it to a 2D structure, and then pull out regions of genetic structure appropriate for use in our chips."

Miller said that initial funding for Lighthouse came primarily from the co-founders and friends and family. As such, Miller, Krauss, and Strohsahl all have undisclosed equity stakes in the company. Each retains a role with the company, as well: Strohsahl as chief technical officer, chairman of the board, and co-chair of the scientific advisory board; Miller as chair of the SAB and treasurer on the board of directors; and Krauss as secretary on the board of directors.

"All of us wanted to take a very active role in getting this to the market," Miller told BTW.

In early 2006, Lighthouse and the URMC OTT sought the services of High-Tech Rochester, a local non-profit economic development organization and incubator that receives financial support from the New York State Office of Science, Technology, and Academic Research.

High-Tech Rochester paired Lighthouse with CEO Henke, who was an entrepreneur-in-residence at the time. High-Tech Rochester also provided Lighthouse with incubator space at its Lennox Tech Enterprise Center in nearby Henrietta, NY; and has continued to assist the company in identifying other members of its management team.

John Fahner-Vihtelic, deputy director of the URMC OTT, told BTW this week that High-Tech Rochester are "our go-to people for business help. It's a well-established high-tech incubator that has helped foster the business development of dozens of companies over the years. It's a tremendous asset to the area and well-recognized as a powerful force in advancing companies in our region."

Also in 2006, Lighthouse received additional undisclosed seed funding from Excell Partners, another upstate NY regional economic development partnership aimed at funding high-tech startups in the region; and obtained an exclusive worldwide license to patent applications covering the researchers' inventions from URMC.

As a result, URMC also received an undisclosed equity stake in the company, which is fast becoming standard for university spinout companies. "Frankly, taking an equity position in lieu of funds is a way that we foster development of that company," Fahner-Vihtelic said. "We take a risk instead of taking cash, hoping they will be successful. In some cases it works, and in some cases it doesn't."

With the new patent under its belt, Lighthouse is now seeking additional funds to help market its technology – always a challenge for university startups not located in a venture capital-rich part of the country, and perhaps even more so considering the current economic climate.

"I think good ideas, good people, and good tech attract investment, so I think that this will succeed for those reasons," Henke said. "Will it be easy? I don't think so. Will the terms be as friendly? Perhaps not. But perhaps the best time to be a startup is in a down market."

Henke added that on the positive side, the in vitro diagnostic and tool market "is not a bad market." He also said that Lighthouse will consider alternatives to VC funding. "There are multiple sources for funding," he said. "There are capital efficiencies that can be realized through grant funding. There are strategic investments that can be made through other large IVD companies."

Lighthouse will initially focus on developing point-of-care diagnostic devices in the field of hospital-acquired, or nosocomial infections. According to the company, such infections remain a "massive burden" on the US healthcare system with more than 1 million annual cases and 90,000 associated deaths, costing the system approximately $5.7 billion annually.

Currently these types of infections are diagnosed by sending samples out to clinical laboratories for analysis, which can take at least two days, which can often impede successful treatment. Lighthouse expects that point-of-care diagnoses – which it estimates can be done within 15 minutes using its technology – will allow doctors to identify and treat nosocomial infections immediately.

Lighthouse said that urinary tract infections account for nearly 40 of hospital-acquired infections, making it the largest category of HAIs. As such, the company plans to specifically tackle UTIs first, and is currently conducting clinical studies to test its screening system at URMC's Strong Memorial Hospital.

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