Since announcing last summer that it plans to divest its capital equipment business to focus on its more successful and stable apparatus and instrumentation business, Harvard Bioscience has been rather tight-lipped about the progress of the sale.
It is still unclear whether Harvard Bioscience can find a buyer for the entire business or whether it's willing to sell it in pieces. However, if Harvard Bio decides to hock it piecemeal, its MAIA Scientific and Union Biometrica business units may be attractive options for companies hoping to enter the high-content screening and cell-based assay markets provided the suitors are willing to look toward the future and non-traditional applications.
According to a 10-Q filed by Harvard Bioscience in August, its capital equipment business comprises products "typically" priced over $25,000 and often over $100,000, and are "typically" sold through a direct sales organization.
These products are sold through several of Harvard Bio's companies, but the firm's HCS and cell-based assay tools are housed in three of its businesses: the MIAS-2 automated microscopy platform, sold by MAIA Scientific; the COPAS flow cytometer from Union Biometrica; and microarray, proteomics, and nanoliter dispensers sold through the Genomics Solutions business.
It may be unlikely that one party will swoop in to purchase all of these assets. There are companies that could be interested in entering the high-content screening and cell-based assay markets, the MIAS-2 and COPAS platforms are anything but conventional product lines for these application areas.
"We're a player in the game of high-content fluorescence microscopy, but the place that we're totally unique is brightfield."
According to Harvard Bioscience president David Green, the "biggest and most important" application for the MIAS-2 automated microscopy is brightfield imaging, or imaging cells in natural light without the use of fluorescent tags.
Considering that much of the high-content screening and analysis for drug discovery today is done using fluorescent markers, it would seem, then, that the MIAS-2 is behind the times. But Green believes that the instrument is geared toward application areas that may begin to see increased play over the next few years.
"The biggest application for this is hybridoma production," Green said. "So it's not really what you traditionally call high-content screening. It's looking for a single clonal cell that you can then grow up into a production system for producing monoclonal antibodies or protein therapeutics. That is still the biggest application for it, and I think it's a unique application."
To wit, the last major deal announced by MAIA Scientific was in 2004 with UK firm The Automation Partnership, which uses the MIAS-2 microscope in its Cello automated cell culture platform (see CBA News, 5/11/2004).
This means the MIAS-2 would come with some guaranteed revenue built in, although how much is unclear. TAP declined to comment on sales figures for Cello, or to identify any customers. A representative also declined to comment on how the MIAS-2 enables the Cello platform.
The MIAS-2 is equipped for fluorescence applications, with lamp-based, filter-enabled fluorescence imaging in either four or eight channels, according to MAIA Scientific's website. However, this is not the major selling point of the instrument, but rather an add-on capability, Green said.
"It can do fluorescence very easily, and it's very good at fluorescence," Green said. "But there are a lot of other people good at fluorescence, too. So I think our fluorescence capabilities in some ways are better than other people's, but in some ways other people's are better than ours. We're a player in the game of high-content fluorescence microscopy, but the place that we're totally unique is brightfield."
Green also said that the company has made a conscious shift toward more forward-looking applications such as high-content analysis of whole tissue samples and small model organisms such as nematode, zebrafish, and fruit flies.
"We certainly expect to sell instruments for traditional high-content screening, and I think potential customers … say, 'OK, I can do these four or five traditional high-content fluorescence assays on the MIAS-2. I can do those on a GE Healthcare IN Cell, I can do those on a Cellomics platform, but here I can also do these brightfield applications,'" Green said. "And even if they're not interested in doing those brightfield applications today, they can see that this will be a very useful capability for them."
One example of this type of work is a collaboration between MAIA Scientific and German company AxioGenesis, which develops embryonic stem cells from mice into fully differentiated tissues for screening potential compounds.
"They cultured these cardiac embryoid bodies that actually developed heartbeats," Green said. "And we're now working with them on developing image-based analysis of those beating cells. This work was originally done on one of our COPAS instruments, from our Union Biometrica branch. But we're now working on using the imaging capabilities in the MIAS-2 to measure the movement of the cells and quantify the heart rate in these tissue samples."
Another example is a project being conducted by a consortium called NemaGENETAG, to which MAIA Scientific is contributing. The group, part of the European Commission's 6th Framework Program, is in the midst of a three-year project to create a library of nematode strains based on the knock-out of each of the approximately 20,000 genes.
"They're using our instrument to do a lot of quality control on these," Green said. "These 20,000 strains are then going to be shipped out to basically anybody who wants them. That's sort of a novel area, moving the idea of genomics [out of] looking at this gene in a pathway of other genes, but looking at this gene in an organism."
This kind of research could be another frontier for high-content screening, as many researchers, and even some small companies, begin to use HCS to conduct functional genomics screens in entire model organisms.
"You could easily plot an evolution-of-the-industry graph, with a rising line where you have molecular-based assays, then cell-based assays, and your next newsletter is probably going to cover tissue-based assays," Green said.
Harvard Bio's Union Biometrica business, meantime, sells the COPAS instrument, which is comparable to a flow cytometer but whose applications "are very different than what you think of when you think of flow cytometry," Green said.
The COPAS is equipped with a 2-millimeter-wide flow tube, which is much larger than the micron-scale flow tubes of typical flow cytometers. This makes the instrument suitable for cells, but even better for much larger objects, such as small organisms or embryoid tissue bodies.
For instance, Green said, Union Biometrica has been working with researchers from Imperial College in London to sort through mosquito larvae as part of a program to produce a dominant-lethal male mosquito strain that might be used to help curb the spread of malaria. The initial results of this work were published in the November issue of Nature Biotechnology.
Another example is using the COPAS for sorting and analyzing embryoid bodies grown from stem cells, such as the cardiac bodies being produced at AxioGenesis. A particularly promising application, Green said, is in quality control of pancreatic islet cells that could be used in potential transplants for insulin-deficient patients. In general, Green said, stem cells are a promising area of growth in drug discovery, and he hopes the COPAS instrument line can make headway in this area.
"Those are wonderful bits of breakthrough that will lead to instrument orders for us, and particularly the islet cell application, if that becomes a major clinical application, will be a major area of growth for the company," he added.
Green's optimistic comments about the potential of the MAIA Scientific and Union Biometrica belie the fact that most of these applications are anything but sure bets for a steady revenue stream in the future a volatility that Harvard Bio cannot support.
"I do think these areas have a lot of promise," Green said. "The issue is that we're a small public company, with [about] $150 million in market cap, and under $100 million in revenues, and we really have two separate businesses.
"We have our traditional Harvard Apparatus business, which has been very successful … and that story has been masked by the volatility of earnings in our capital equipment product lines," he added. "That's just a reality capital equipment is more volatile, and tends to have boom and bust cycles. Could you do this if you were a much bigger company? Sure you could. But that's the reality of where we are."
Ben Butkus ([email protected])