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Services Startup Eureka Genomics Opens First Lab to Offer Next-Gen Sequencing, Data Analysis

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Sensing a need for more services that combine next-generation sequencing with in-depth data analysis, startup Eureka Genomics recently acquired its first sequencer, an Illumina Genome Analyzer, for a new services facility in Hercules, Calif.

Over the next 12 months, the company hopes to open three more sequencing labs in partnership with biology researchers, probably in Thailand, Mexico, and France, for which it will provide bioinformatics services using a set of proprietary software tools.

Eureka officials said that over the next several years, the firm wants to use these labs to provide molecular diagnostic services, in addition to sequencing.

The company was founded in 2006 based on bioinformatics technology it licenses exclusively from the University of Houston. The firm has raised an undisclosed amount of funding from angel investors and a small venture capital fund. By the end of this year, Eureka plans to approximately double its current headcount of nine employees.

The technology was developed over the last seven years by Yuriy Fofanov, director of the Bioinformatics Lab and an associate professor of computer science as well as biology and biochemistry at UH. Fofanov is also the chief technology officer of Eureka Genomics.

According to Eureka's website, Fofanov has developed "several highly efficient algorithms and software applications for the analysis of genomic sequences," and his research has focused on new pathogen detection technologies and understanding host-pathogen interactions.

To facilitate ongoing collaborations with UH scientists, Eureka opened an office at the Houston Technology Center, where it develops its bioinformatics tools and performs data analysis services. The company decided to open its first sequencing facility in Hercules, Calif., where its co-founder and chief scientific officer, Heather Koshinsky, runs another company, Investigen.

Eureka started offering sequence analysis services about a year and a half ago, using a Genome Analyzer housed at UH. But the company soon realized that it would be beneficial to acquire its own sequencer in order to be able to control the quality of the sequence data and have access to an instrument at all times, and because it wanted to develop molecular diagnostic tests.

"Also, the best way for us to offer bioinformatics services that are quite unique is to be able to entice customers to do both — sequencing and bioinformatics," Didier Perez, Eureka's chief financial and chief operating officer, told In Sequence. He is also CFO and COO of Investigen, and the managing partner of Inovation Ventures.

A few weeks ago, Eureka installed an Illumina GAIIx at its Hercules lab, although its analytical services are not restricted to data from this platform. "Our bioinformatics services are set to work with any platform, but our deepest experience so far has been with the Illumina," Perez explained. "But that is not to say that we will not use other next-gen sequencers" in the future. As demand increases, he said, Eureka plans to add more instruments to its sequencing lab.

Services include sample preparation, sequencing, data analysis, and data management and are priced according to the needs of each project. Starting next month, Eureka will provide "a full package of [next-generation sequencing] and bioinformatics services" at "promotional prices" for three months, according to Perez.

The company offers genome sequencing, targeted sequencing, and RNA sequencing. Its bioinformatics services — provided by staffers at the Houston location after the data has been transferred online — include analyses of the quality of sequencing reads, mapping of reads to a reference, de novo assembly of genomes, and an analysis of reads not mapped to a reference.

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One focus is in the area of microbial genomics, since both Fofanov and Koshinsky provide "a large pool of knowledge on bacteria [and] microorganisms," Perez said.

The firm's proprietary algorithms, which run on supercomputers, "speed up the rate of computation on massive [next-generation sequencing] datasets by at least a factor of 20" compared to competing de novo assembly and mapping tools, he claimed.

In addition, the company has "proprietary data structures" that allow it to parse the data such that it can be manipulated efficiently, he said. This allows researchers "to avoid heuristics and approximation in the processing of [next-generation sequencing] data and get to answers that have not been possible to achieve before."

Eureka also has a database of references sequences that includes 500 bacterial genomes, 100,000 viruses, and several dozen host genomes, including the human genome, as well as 5 million human SNPs and 40,000 human ESTs, according to its website.

Perez claimed that the firm differs from most other service providers in that it offers both sequencing and in-depth analytical services. Eureka's bioinformatics services "would be most comparable" to consulting services of bioinformatics firms like CLC Bio or GenomeQuest, he said.

However, other sequencing service providers also say they are aware of the bioinformatics challenges that come with next-generation sequencing data and offer their customers appropriate support. Houston-based provider SeqWright, for example, states on its website that its staff of scientists and bioinformaticians "are on hand to guide you every step of the way, from project design to downstream data analysis."

Last fall, Eureka Genomics sequenced and assembled a rough draft of a bacterial genome de novo for Glycos Biotechnologies, a Houston-based firm that engineers microorganisms to convert industrial side products into higher-value biochemicals.

"What was important for me was to be able to get a de novo sequence quickly. I understood Dr. Fofanov's technology and believed that it could deliver a sequence faster than other technologies," said Glycos Chief Science Officer Paul Campbell.

In addition, Eureka was able to "act as an outsourced bioinformatics group for our company," he said, adding that he will use the firm again when funding becomes available.

So far this year, Eureka said it has received $500,000 worth of orders for its next-generation sequencing and analysis services and expects $3 million in sales for the next 12 months. Its current customers include pharmaceutical, biotechnology, and alternative energy or "cleantech" companies, as well as universities and government laboratories.

Later this year, the company plans to open three additional sequencing labs in partnership with biology researchers, probably in Thailand, Mexico, and France, according to Perez. "We will assist them in selecting the sequencer, we will bring them here, we will train them, they [will] go back and set up the lab with our supervision, and then we will provide the bioinformatics services" in Houston, he said.

In the future, the company hopes these labs will also be able to offer molecular diagnostic testing services based on tests that Eureka is currently developing in house. These tests, of which Eureka wants to develop at least five within the next two to three years, will focus on chronic diseases and cancer, according to Perez. He did not elaborate.

Under an agreement announced earlier this month, privately held Eureka is scheduled to merge with drug discovery firm Nanobac Pharmaceuticals, which trades on the Pink Sheets, by the end of the second quarter.

Following the merger, the company will be called Eureka Genomics, and Eureka stockholders are expected to hold 85 percent of the combined company.

According to Perez, the merger is not expected to lead to any changes at Eureka Genomics.

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