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Fluxion Will Use $6.9M in VC Cash to Develop, Market Microfluidic Platforms

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Fluxion Biosciences announced earlier this month that it has secured $6.9 million in a second round of venture capital and angel funding to help it hire more staff and to develop and commercialize three technology platforms.
 
They are the BioFlux 100 and 200 microfluidic platforms, which can be used for biofilm analysis and cellular-adhesion analysis, respectively, and the IonFlux automated-electrophysiology platform, which is intended for ion channel studies.
 
The company launched the BioFlux platforms last March and hopes to launch the IonFlux platform in the next two to three years.
 
Fluxion, based in the University of California at San Francisco’s Mission Bay campus, will also use the money to hire more scientists and engineers to expand the company’s basic research as well as its application and product-development efforts, CEO Jeff Jensen told CBA News last week.
 
“How many persons we actually hire is dependent on how quickly we make it happen,” Jensen said. “We are currently at seven people. We want to be at 14 by the end of the first quarter of 2008 and at 20 by the end of 2008.”
 
Kodiak Venture Partners led the round with $4 million and Claremont Creek Ventures participated with $2.7 million. Life Science Angels also contributed an undisclosed amount in this round, after having contributed an unspecified amount to an initial financing round last May. At the same time, the company received a $1.2 million Phase II Small Business Research Innovation grant to continue developing its IonFlux platform (see CBA News, 5/18/07 and CBA News, 5/25/07).
 
Biofilm and Adhesion Studies
 
The BioFlux 100 and 200 systems are used to modulate flow patterns and apply reagents during shear force experiments. The fluidics are designed to be used with standard well plates.
 
“Right now, the BioFlux is designed as a tool that’s used primarily for manipulating cells in a controlled environment,” said Jensen. He added that the platform is typically interfaced with a microscope for downstream analysis of captured images.
 
“With the funding we got, we plan to automate more of the image capture and analysis,” which will allow researchers to run a full experimental protocol, rather than just manipulating the cell, he said.
 
Jensen said that investigators will be able to capture images and analyze them so that they can start to quantify events in the microenvironment of the cell. Such events could be related to cell adhesion, which is very important in immune disorders and cardiovascular disease, or biofilm analysis, which is important in a number of infectious diseases.
 
“One important area of drug discovery that [Fluxion] feels is relatively underserved at this point and represents relatively fertile ground is ion channels,” which are viewed as very important drug targets for a number of disorders, including CNS disorders, pain, and cardiovascular disorders, Jensen said.
 
Jensen said that ion channels are a different target to go after because the screening of them is not straightforward. “These channels can only be tested in a cell, and so [researchers] have to do a cellular assay, plus [the assay] needs to be done in such a way that an individual cell becomes part of an electrical circuit,” he said.
 
Investigators are looking at how the current flows through the cell as they add different compounds, said Jensen, because they want to know how those compounds modulate the opening and closing of these channels.
 
Jensen said that methods used today require a lot of skill and are time and labor intensive. Several attempts have been made at automating this process, and the first wave of automated systems has been introduced, he said.
 
“What we are hearing from the pharma companies is that they like these automated approaches, but they want to see more capabilities that allow them to screen even more compounds faster and at lower cost,” he said
 
Fluxion’s IonFlux platform can simultaneously trap and record data from 16 individually selectable mammalian cells under optical observation. Up to six different compounds can be applied to either all trapped cells or a specific subpopulation.  
 
Fluxion has sold a handful of IonFlux systems to beta-testers as a “scaled-down, benchtop format,” Jensen said. He said that systems are currently with researchers at the University of California at San Francisco, the University of Birmingham in England, and Virginia Tech.
 
He mentioned that the company has been getting feedback on those systems from the users.
 
“[Fluxion] has a few application scientists that are generating screening and patch-clamp data on the IonFlux platform,” said Jensen. The company is internally building up its application data, and part of the funding is being used to expand that effort, he said.
 

“With the funding … [Fluxion ] plans to automate more of the image capture and analysis. This will allow researchers to run a full experimental protocol, rather than just manipulating the cell.”

As Fluxion demonstrates favorable capabilities of the IonFlux to potential pharmaceutical partners, it is entering into material transfer agreements with these companies, Jensen said. Fluxion is doing benchmarking on its platform using some of [the pharmaceutical companies’] validated cell lines.
 
This allows the pharmaceutical companies to directly compare how the cell lines run on Fluxion’s system versus how they run on their current system, Jensen said. From that point, based on favorable results, Fluxion is moving into early-access programs.
 
He said the company has two material transfer agreements with a pair of top-10 pharma companies, but he could not elaborate because he is bound by non-disclosure agreements.
 
John Steuart, a co-founder and managing director of Claremont Creek, which participated in Fluxion’s latest private equity round (see Migrations, this issue), said that ion channel studies, in a post-Vioxx world, are important because there are many interesting targets, including ligand-gated ion channels.
 
Market Trends
 
Certain drug development marketplace dynamics make single-cell assays very appealing, said Andrey Zarur, general partner of Venture Partners, which led the round.
 
“The drug development market needs accurate, repeatable assays performed in cells, and running experiments in single cells is clearly a better way to go than doing experiments in whole cell populations,” he said.
 
Zarur, whose company’s investment in Fluxion has made him a director, added that one reason why he likes Fluxion is its platforms’ combination of advanced microfluidic technology, which allows scientists to test cells in a very controlled environment, with the multiplexity of the multiwell format used by the BioFlux and IonFlux platforms, which allows investigators to run many experiments at relatively low cost.   
 
“On the one hand, Fluxion’s platforms are able to perform extremely well-controlled experiments that are very reproducible and accurate, and on the other hand they have a 96-well format which takes advantage of billions of dollars invested in lab automation and reduces the cost of drug development on a per-experiment basis,” he said.
 
Steuart said Claremont Creek has been watching Fluxion since Cristian Ionescu-Zanetti, its chief technology officer, invented the prototype version of the technology at the University of California at Berkeley.
 
Another “enormously impressive” draw was that the founding team at Fluxion “was very good about going to the business community and the venture community and seeking input about building a better company,” he added.
 
Steuart, whose company also bought him a seat on Fluxion’s board, explained that he advised Ionescu-Zanetti and Mike Schwartz, Fluxion’s current director of operations and business development, to hire engineers who have built a lot of commercial products and taken the technology from the prototype stage to the product stage.
 
He also urged the shop to hire someone who has done product-marketing research and who understands where the greatest needs are in the areas where their technology has applicability, so that they could prioritize technology development around market needs as opposed to having a technology seeking applications.
 
Likewise, Steuart advised hiring a CEO who had experience taking a broad, platform-like technology and identifying which applications to go to market with first.
 
He said that in Jensen, Ionescu-Zanetti and Schwartz found a CEO who had prior experience at Eksigent with a very broad platform technology, who was able to identify the applications that would not take too much development time, and serve a pretty big market where there is a pretty big need.
 
“Jeff did a great job getting Eksigent from zero to $20 million or so in sales,” said Steuart.  
 
Steuart also said he urged Ionescu-Zanetti and Schwartz to “hire people from Molecular Devices and Axon Instruments who had brought to market a couple of products in the ion flux field, an area where Fluxion’s technology has applicability, and they are now a very engaged part of the team.”
 
Steuart he also advised the two executives to find some value-added investors. “One group that is particularly helpful is Life Science Angels, because it comprises executives and founders who are scientists and have experience with biology-based companies, and have built products and made some money at it, and are looking to invest in promising technology,” he said.
 
Jensen said that during the first quarter of 2008, Fluxion will move from its home at UCSF to “a much larger space … within the Bay Area that will be suitable for housing [the company] for at least the next two to three years.”

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