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Gentronix Closes $2.7M Funding Round, Plans To Grow US, UK Sales Force, Expand Portfolio

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A month after launching its first human cell-based genotoxicity assay, UK-based Gentronix said this week that it has raised £1.4 million ($2.7 million) in financing to help drive growth over the next year.  
 
John Nicholson, chairman and CEO of Gentronix, told Cell-Based Assay News that the company plans to use the funding to build out its sales force in the UK and the US. The firm, spun out of the University of Manchester in 1999, currently employs 12 full-time staffers and three part-timers, and Nicholson said he expects to add another three to six people over the next year.
 
Initial hires, he said, will be a commercial director for the firm’s UK headquarters, a business-development director for the US market, and a technical manager “who can bring a different slant to our technology development.”
 
The company also hopes to expand its presence in the downstream drug-discovery market and forge alliances with contract research organizations, which will use the firm’s new human genotoxicity assay in their testing services.
 
“Obviously, we want to grow, so our medium-term objective over the next two to three years would be to grow the business from where we are — somewhere between £500,000 and £1 million — to £5 million,” he said.
 
The company will first focus on driving sales of its existing assays — GreenScreen GC, a yeast cell-based assay for genotoxicity and cytotoxicity testing; GreenScreen EM, an environmental monitoring product based on the same technology; and GreenScreen HC, its newly launched human cell-based genotoxicity test [CBA News 02-09-07].
 
However, Nicholson said that the company also plans to stay on the lookout for opportunities to expand its product portfolio. “We need to look around for — as well as develop our own in-house — alternative technologies,” he said. “We need to keep our eyes open to grow the company by looking around for affiliative technologies.”
 
As for the private equity, £1 million came from NVM private Equity Limited. The balance came from the Manchester Technology Fund and YFM Private Equity Limited, both of which participated in the company’s £1 million round in May 2005.
 
Banking on GreenScreen
 
The newly launched human cell platform should expand the company’s footprint in the market, Nicholson said. The selling point for the GreenScreen GC, he said, was that it was closer to a human cell than the bacteria that are typically used in genotoxicity screening, but potential customers apparently weren’t convinced of the value of the platform.
 
“I think some of them remembered some old yeast assay of 20 years ago that wasn’t terribly successful, and I think they sort of held it against yeast a little bit,” he said.
 
But he said that Gentronix has seen a turnaround in customer interest since the launch of GeneScreen HC. “People are ringing us now instead of us having to chase them,” he said. “I think we’re making some real progress in terms of people recognizing that the existing tests are not particularly fantastic in terms of performance, and recognizing that they, as organizations, need to get a bit faster, slimmer, [and] do things differently.”
 
Nicholson said that he sees an opportunity for the company to expand its presence upstream in the drug-development process. Customers like Johnson & Johnson and GlaxoSmithKline currently use GreenScreen for regulatory testing, “so we’re trying to move into the profiling area where we’re talking tens of thousands of compounds, rather than lead optimization, where we might be talking hundreds or one to two thousand, or regulatory, where you’re talking less than 10.” 
 

“Obviously, we want to grow, so our medium-term objective over the next two to three years would be to grow the business from where we are — somewhere between £.5 million and £1 million — to £5 million.”

He said that the company is in discussions with several large pharmaceutical firms about adopting the assay for compound profiling, and has had a “favorable” response. “Certainly the human cell has a lot more empathy with people and they see the value in it,” he said.
 
GreenScreen HC is based on the human gene GADD45, which plays a central role in DNA damage in human cells. In the assay, that gene is co-expressed with green fluorescent protein in a human lymphoblastoma cell line called TK6.
 
Gentronix claims that the assay is more effective than the current battery of regulatory tests for genotoxicity, such as the Ames test, the mouse lymphoma assay, and the micronucleus test. Last June, researchers from Gentronix, the University of Manchester, and GlaxoSmithKline published a validation study in the journal Mutation Research/Genetic Toxicology and Environmental Mutagenesis that found that the assay exhibited both high specificity and high sensitivity in a study of 75 well-characterized genotoxic and non-genotoxic compounds.
 
Nevertheless, Nicholson said that the firm isn’t planning on pushing its test into the regulatory arena just yet. “We’re not setting our stall out to be a regulatory test because we’ve got to make money, and we can’t afford to wait around for five years while these things happen,” he said.
 
“It looks as though it does perform better than the regulatory tests, so we would see it working in tandem with some of the regulatory tests in the future, and hopefully becoming a regulatory test, but we’re not pushing ourselves at this stage,” he said.
 
Gentronix is also planning on expanding its presence in the US market. Around 75 percent of the company’s sales are currently in Europe, Nicholson said, and the firm hopes that a dedicated business development manager in the US will help establish a stronger foothold.
 
The company also plans to enter partnerships with contract research organizations who will add GreenScreen HC to their testing services. Nicholson said that Gentronix is currently in the process of finalizing an agreement with its first CRO partner, but he declined to name the company.

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