Once populated primarily by small, privately held biotechnology companies, the high-content drug screening market is heating up, as publicly traded biotechnology mainstays are starting to stake their claims.
In the latest example, announced on July 1, Becton Dickinson’s BD Biosciences arm acquired Rockville, Md.-based Atto Bioscience in a cash transaction valued at approximately $25 million. The deal follows a rash of announcements in the past six months involving large, publicly held biotechnology companies, including GE’s April acquisition of Amersham Biosciences, and Molecular Devices’ acquisition of Axon Instruments, which was just completed last Thursday (see the News Scan in this issue).
In each of these transactions, the buyer acquired key HCS instrumentation platforms to complement its existing portfolio, and the BD Biosciences deal is no different. Atto’s flagship product is the Pathway HT automated, confocal, single-cell kinetic and endpoint imaging system. BD Biosciences is well-known for its flow-cytometry based instruments, such as the FACSArray bioanalyzer, as well as its cell assay reagents, including its suite of fluorescent proteins and cell transfection agents. It now adds a plate-based imaging system to its repertoire, seemingly covering all the bases in high-content screening instrumentation.
“Many of the same skill sets that we have for the flow analysis business just absolutely complement this platform,” said Mark Lewis, a vice president and general manager at BD Biosciences who is now responsible for the Atto business. “It’s an ideal acquisition for us, because it really leverages our strength in flow cytometry and our knowledge of cell biology,” he added.
“It’s really about leveraging the technologies and the expertise that we have within the organization with the expertise that they have at Atto,” Lewis said. “It’s an area that we haven’t played as strong a role [in] in the past, and this is a platform that gives us entry. It’s an important, growing market in drug discovery.”
Lewis also told Inside Bioassays that BD Biosciences plans to utilize Atto’s current assets with minimal restructuring. “It’s not a buy-and-move kind of situation,” Lewis said. “We’ll continue to have a facility in Rockville. Obviously, there are connections we can make across the organization, but we intend to keep that facility there.” Lewis also said that BD Biosciences expects to retain Atto’s employees.
Atto was founded in 1985 as Atto Instruments by Gary Brooker, who is currently a research professor of biology at Johns Hopkins University, as well as director of Maryland’s Montgomery County Integrated Imaging Center. About three years ago, when a company called Life Sciences was purchased by Invitrogen, many of the former Life Sciences employees joined Atto Instruments, which subsequently became Atto Biosciences.
Brooker developed the intellectual property that is at the core of the current Atto instrumentation. That core IP, according to Philip Vanek, Atto’s director of corporate development and strategic marketing, was originally the basis for two Atto instruments. The first was the AttoFluor, an instrument capable of making kinetic fluorescence measurements and, according to Vanek, “really one of the first high-content screening imaging systems.” The AttoFluor was originally geared towards measuring ion-channel flux in cells, Vanek said.
The second instrument was the CARV spinning disk apparatus. Based on a Nipkow disk, CARV is an adaptor for a fluorescence microscope that lends it confocal-like ability without necessitating the expensive, high-maintenance laser typically found in confocal microscopes. Atto still markets the CARV today as a stand-alone adaptor for research-grade fluorescence microscopes.
According to Vanek, one of Atto’s pharmaceutical customers approached the company with an idea of how the two technologies could be combined. “He said, ‘If you take the CARV and the kinetic fluorescence platform and combined them, they would be a great screening instrument’,” Vanek recounted. The result was the Pathway HT system, for which the patent also names Brooker as the inventor.
Around the same time, Vanek said, Cellomics arose and quickly cornered the high-content screening market with its assay, informatics, and instrumentation technology. And although Cellomics is still seen as the market leader in high-content screening, Vanek said he thinks that the Pathway is one of the most attractive instruments on the market because of its flexibility — particularly its ability to run both kinetic and end-point fluorescence assays.
“In all fairness, Cellomics developed the high-content field,” Vanek said. “People, though, still wanted endpoint assays — the kinetic stuff was just too much. It was almost information overload.” Cellomics markets separate instruments for kinetic and endpoint assays.
“Cellomics was software-based,” Vanek added. “They built instruments, and also had instruments built for them. Our value proposition was more in the instrumentation, and we built a software package to run all the different type of assays that people wanted on one instrument. Researchers should be able to run any of the Cellomics assays on [the Pathway HT].”
Vanek also said that he sees the Pathway’s biggest value to pharmaceutical customers being in assay development, ADME/tox studies, cellular quality control, and some secondary drug screening. “I don’t think high-content is ready to be applied in the screening world just yet,” he said. “Some of these instruments are very fast — we’re all within a window of speed — but none really goes into the 100,000 to 500,000 points per day that is desired in screening.
“It’s not that the screening labs don’t want the technology,” he added. “But it’s more difficult for labs to employ it with the idea of moving these enormous amounts of samples through daily.”
Vanek said the majority of Atto’s customers are academic, but the company also has several pharmaceutical customers. Publicly disclosed customers include Johnson & Johnson and Merck, as well as “a lot of others that we can’t disclose,” he said.
IP to Market
Although Brooker invented the technology behind Atto’s instrumentation, Atto became the assignee of the corresponding US patents. Meanwhile, Brooker left Atto a little over a year ago and settled back in at Johns Hopkins “to continue my work in cell science and the development of advanced tools in microscopy and high-throughput screening,” he said.
“I felt that to be able to continue the creativity that made [Atto] … I decided to move back to academics, where there’s more flexibility,” Brooker told Inside Bioassays. “I hope at Hopkins to continue to develop great technology, because tools are the secret to discovery.”
Brooker continued to serve on Atto’s board of directors until the acquisition, and his son, Jeff Brooker — who is also a co-inventor on several of the pertinent patents — remained as vice president of engineering and operations. Nevertheless, Brooker retains his pride in the company and its products, especially the Pathway HT.
“I think that it blows every other technology out of the water,” Brooker said. “It’s very strong because of its flexibility, particularly because you can use any wavelength [of excitation light], and use it confocally.”
The numbers certainly support this claim: Atto reported $3 million in sales in 2003, and that number was expected to double this year, the company said.
“For me, it’s a great redemption about the technology,” Brooker said. “With $3 million in sales last year and a $25 million purchase price, it’s apparent that they really valued the technology.”