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Febit Exits Sequencing Market, Cuts 60 Percent of Workforce in Restructuring

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By Monica Heger

This article has been updated from a version posted June 23 to include additional information from the company.

German microarray company Febit is letting go around 60 percent of its workforce as part of a restructuring that will cut its entire genomic tool and services business and enable the company to focus on blood-based miRNA biomarker discovery.

As part of the restructuring, Cord Stähler, Febit's president and CEO, resigned from the executive board and joined Siemens Healthcare. Additionally, Peer Stähler will no longer be the company's chief scientific officer, but will remain a part of its scientific advisory board.

Hartmut Voss, who co-founded Lion Bioscience, has joined the company as co-CEO with Jochen Kohlhaas, who will also continue as the company's CFO.

Voss told In Sequence that Febit needs to focus on just one aspect of its business, and that it did not make strategic sense for the company to remain in the sequencing business. He said Febit will no longer provide any sequencing services or sell sequence-capture arrays, though it will continue to provide support for its existing customers.

"We're going to stop services," Voss said. "This does not mean that the [HybSelect platform] will be put down. We'll continue to use it internally." Voss said the company will wrap up its current service jobs and will also continue to supply existing customers with reagents and other products and support.

He cited competition from larger companies such as Agilent Technologies and Roche NimbleGen, as well as the declining costs of whole-genome sequencing, which would eventually replace targeted resequencing, as reasons for discontinuing that side of the business.

"The company was selling instruments and providing chemicals for the instruments. The company was selling chips. The company offered a broad range of services — sequencing enrichment services for next-gen sequencing, next-gen sequencing itself, expression profiling, and microRNA profiling," he said. "For a small, non-public company, and being in competition with billion-dollar companies, it was too wide a span."

The announcement comes just over a year after Febit first entered the sequence-capture market with the launch of its HybSelect microarray-based DNA-capture product for next-generation sequencing (IS 3/17/2009). Initially, Febit provided the microarray as both a product and as a service, outsourcing the sequencing, which was done on the Illumina Genome Analyzer. Then, in September, Febit struck a non-exclusive co-marketing agreement with Life Technologies and acquired two SOLiD machines (IS 9/29/2009) at its Heidelberg location, allowing Febit to do the sequencing in-house, which it said reduced its turnaround time from four to six weeks to 10 days.

As recently as December, the company said it would focus on targeted resequencing (IS 12/15/2009). At that time, Febit's chief scientific officer Peer Stähler said that HybSelect distinguished itself from other microarrays because it focused on smaller targets and did barcoding, which allowed for multiplexing. Stähler also said that the company had plans to launch several more chips that would target up to ten-fold more DNA per sample.

The company then expanded its sequencing services to include whole-genome and transcriptome sequencing on the SOLiD, and in February launched its HybSelector platform for targeted resequencing.

However, Voss said the company recently re-examined the sequencing market, and it no longer made sense to remain in it. Voss said it was not viable for Febit to be a next-gen sequencing service provider because the company has only two SOLiD machines, and would not be able to compete against large genome centers with tens to hundreds of sequencers.

Also, the falling price of whole-genome sequencing has given targeted resequencing a short shelf life. "It's on a 12- to 24-month time frame, and then it is no longer worth doing," Voss said.

Voss said that the decision had nothing to do with the performance of Febit's platform. "It is purely market driven. If Febit had a strong strategic partner, then it would be a different market."

However, several studies have been critical of the company's capture method. A study by the Association of Biomolecular Resource Facilities' DNA Sequencing Research Group presented at the ABRF annual meeting in March found that both the Roche NimbleGen array and Agilent's SureSelect in-solution capture method outperformed Febit's HybSelect array (IS 4/6/2010). The HybSelect method captured only 40 percent of a continuous 2.1-megabase region, while the NimbleGen and SureSelect methods captured 90 percent and 70 percent, respectively.

The National Center for Genome Research also evaluated, and then eliminated, Febit's capture method in a project to design a prenatal genetic test (IS 3/30/2010) due to poor enrichment.

Voss said that the company has not made a final decision on whether it will keep its two SOLiD machines, although he did suggest that having at least one machine would be useful for internal purposes.

"RNA-seq is a useful technique for the discovery of unknown, novel miRNAs, so it makes sense to have the technology around," he said. Voss said Febit will focus on miRNA biomarker discovery in diseases such as breast, lung, and colon cancer, as well as cardiovascular diseases and inflammatory diseases like multiple sclerosis.

He said that Febit has already been partnering with clinicians, and that there would be more opportunities for partnerships and as well as opportunities to file IP on the discoveries.

Christof Hettich, chairman of Febit's supervisory board and managing director of Febit's main investor, Dievini Hopp BioTech Holding, said that the miRNA biomarker business is the company's "most successful business segment."

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