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Illumina Planning Sample Prep Products for ALL Technology, Will Move Business to San Diego in 2014

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Following Illumina's acquisition of digital microfluidics firm Advanced Liquid Logic last month, the company is now planning how it will integrate ALL's electrowetting technology into new sequencing sample preparation products and evaluating what other applications to pursue that ALL had been working on.

As part of its second-quarter earnings last month, Illumina announced that it had acquired ALL for up to $96 million in upfront and milestone payments (IS 6/30/2013). By the end of 2014, it plans to close ALL's North Carolina location and move the business over to its San Diego headquarters.

"We think this is a core technology for the company," said Christian Henry, Illumina's senior vice president and general manager of its genomics solution business. "I suspect it will get integrated into our products in lots of different ways."

Henry told In Sequence that the acquisition is consistent with Illumina's strategy to acquire "leading technologies" that fit into the workflow of its products. "We see that we need to focus on the entire sample-to-answer workflow, not just to have the world's most powerful sequencers," he said.

Earlier this year, for example, Illumina acquired Moleculo, which had been working on methods to construct long reads from short reads (IS 1/15/2013). In early 2011, it acquired Epicentre Biotechnologies (IS 1/18/2011) and has already incorporated that firm's Nextera library preparation technology into several reagent kits.

Illumina plans to use ALL's electrowetting technology, which utilizes thousands of electrodes to move microliter-sized droplets around in a cartridge, to automate and miniaturize several of its sequencing sample prep assays. "It gives us a core platform for which we can develop sample prep methods that will integrate more closely into the sequencing workflow," Henry said.

Such a system would reduce the sample volumes that are currently required and would be easy to operate, allowing users to "get very consistent results, time after time," Henry said. It would also be closely integrated with Illumina's BaseSpace cloud computing environment.

Longer term, Illumina plans to couple ALL's sample prep technology "more directly" with its sequencing technology, he said, developing a sample prep system that is "tied very closely to the sequencer itself," as well as the bioinformatics back-end, which would be advantageous for both clinical and research workflows.

Illumina is still in the process of determining what sample prep products will incorporate the ALL technology, and has not yet finalized the product design, but Henry said any products will likely be for both the MiSeq and the HiSeq.

These products might compete with an existing sequencing sample prep device from NuGen Technologies, called Mondrian SP+, that ALL manufactures and developed for NuGen under an exclusive co-development and supply agreement that the companies penned two years ago (IS 4/17/2012). "The Mondrian does a really nice job in its market," Henry said, adding that Illumina is fulfilling its obligations under the contract with NuGen and "making sure we do everything we can to make that product successful." He declined to reveal the duration of the partnership with NuGen.

According to Rich West, ALL's CEO until the acquisition, the company's electrowetting technology has advantages over other droplet-based microfluidic technologies, for example RainDance Technologies', because it requires no pumps, pipes, or valves and does not use pressure to move liquids around.

An electrowetting system consists of an instrument, a cartridge, and reagents. The cartridge combines a top plate that is similar to a multi-well plate and a printed circuit board with thousands of electrodes, and the droplets are moved around in between those two layers. "Very simply, when you turn one electrode off and turn its neighbor on, the droplet moves to the energized electrode. The surface is made locally hydrophilic by turning on the electrode, so the droplet is attracted to that location," West explained. "We just turn switches on and off to move liquids around."

While Illumina's focus for the ALL technology will be on sequencing, Henry said it is too early to tell whether it will continue to pursue any of the other applications that ALL had been developing. Illumina will evaluate these over the next quarter or so. "There is no question, our major focus will continue to be sequencing, because we see that by far as our biggest market opportunity," he said.

For example, ALL has a newborn screening platform that tests for lysosomal storage disorders in pilot trials with the Missouri State Public Health Laboratory, and the Mayo Clinic is testing the device in a comparative-effectiveness study. The instrument, the LSD-100 Lysosomal Storage Enzyme Analyzer, performs biochemical assays on dried blood spot extracts. A year ago, ALL received a $3 million grant from the National Institute of Child Health and Human Development to further develop the platform.

In addition, ALL has ongoing development projects for molecular diagnostic platforms with GenMark Diagnostics and Luminex. Illumina said it will meet its contractual commitments to ALL's partners, customers, and granting agencies. "We are still sorting out the details of how we are going to do that," said West.

He explained that in order for ALL to take its technology and products "to the next level," the company had to either raise equity capital or be acquired by someone with greater resources and a commercialization team. "We explored both of those options and decided that the best path forward was to sell the company," he said.

Henry said that the main reason for Illumina to acquire ALL, after collaborating with the company for several years, was that "we see this technology as a very unique core competitive advantage." Owning the company allows Illumina "to get the ALL staff focused on a number of different programs we have internally," he said, as well as to "protect the technology for Illumina."

By the end of 2014, Illumina plans to build a "center of excellence for digital microfluidics" at its San Diego headquarters and move the ALL business over from North Carolina. "We see this technology as being so fundamental to our strategy in the future [that] we want to get the talent to be as close to our product development and research talent as possible," Henry said.

ALL was founded in 2004 by Michael Pollack and Vamsee Pamula, who worked on the electrowetting technology as graduate students and postdocs at Duke University's Pratt School of Engineering. It was funded by government grants, commercial partnerships, product revenue, as well as equity from angel investors and commercial partners and raised more than $15 million in equity funding over the years.

In 2007, the company acquired Nanolytics, a North Carolina-based microfluidics company where Pollack used to work prior to his studies at Duke, and in 2009, it acquired ULCA spinout Core Microsolutions. Both companies had been working on aspects of electrowetting and provided ALL with additional intellectual property.

In 2011, ALL also signed a licensing and collaboration agreement with CEA-Leti, a French research institute, giving it access to CEA's patents on digital microfluidics.

At the time of the acquisition by Illumina, ALL had about 80 employees, 100 issued patents, and a large number of patent applications.

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