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Startup Eureka Genomics to Exploit Next-Gen Sequencing with U Houston Software

With all the data coming out of next-gen sequencers, it was only a matter of time before the market caught up to exploit demand.
Thus, Hercules, Calif.-based start-up Eureka Genomics will provide next-gen and post-sequencing services worldwide after inking an exclusive licensing agreement with the University of Houston to use proprietary sequence-analysis tools developed by Yuriy Fofanov, an assistant professor and director of the Bioinformatics Lab at UH.
With these tools, the new company plans to open as many as 20 centers where it will offer sequencing services and analysis, and also develop its own molecular diagnostics.
On Feb. 1, Eureka Genomics will open its first sequencing center in Hercules, Calif., where it will install an Illumina Genome Analyzer in the coming months.
Two of the company’s three founders are principals with Investigen, a molecular diagnostic firm that is based in Hercules and shares an office building with the startup there. Eureka’s CSO, Heather Koshinsky, is Investigen’s CEO, and Didier Perez, Eureka’s COO, is CFO at Investigen. 
Funding in the US comes from VCs, Perez said, with its off-site locations being funded by VCs as well as governmental grant money. “For outside the US it is one-third local government subsidies, grants, and so forth; with one third [of the money coming from] local investors and another third from Eureka Genomics.”
Asked for the names of the VCs, Perez said he could not disclose that information.
Perez told BioInform that there is no contractual link between the two companies, though he noted that any diagnostics developed at Eureka may eventually be of interest to Investigen. He said that “Investigen may buy products developed by Eureka, like other diagnostics companies [will do].”
Perez said that Eureka may open its next facility in June in Genopole, France. Both centers will initially focus on the food and wine industry, he said.
Eureka was registered in Delaware on Oct. 31, 2007. In addition to Koshinsky and Perez, UH’s Fofanov rounds out Eureka’s management team.
Koshinsky said that Eureka’s goal “is really to provide… the tools for the advanced genome sequence analysis that is required, [given the] plethora of sequence information that is currently being produced, and will be produced, at a faster and faster rate over the next 10 years.”
Financial details of the licensing deal with UH could not be disclosed, although Fofanov told BioInform that it cost about $3 million and six years to develop the software.
Koshinsky said that Eureka will look at “certifying both their own and third-party sequencing centers in countries around the world, and … have them interact with Eureka Genomics in the United States.”
Perez said this means that the centers will be trained in using Eureka Genomics’ technology. “We created Eureka Genomics as a technology company that is going to be developing advanced sequencing solutions for next-gen sequencing and … diagnostic tools for [the] food and life science industry,” he said.
He added that the company is planning a network of centers because “we believe testing and sequencing … is a local business.” He likened the model to a neighborhood blood bank, noting that instead of drawing blood, the Eureka centers will offer “genetic testing and diagnostics right there.”
The centers will sequence the samples, analyze the data, and “provide the client with the results on a CD, which they can load on a flash card and pass on to their [principal investigator] to work on.”
The centers are also being set up to discover DNA or RNA biomarkers. Eventually, the company hopes to develop diagnostic kits that would be sold to hospital labs for clinical applications and food companies for food analysis.
”For example, now that we are able to sequence specific cells, we will work on [developing] purely molecular diagnostic tools that we couldn’t before, because we couldn’t sequence the whole genome,” Perez said.

“The chemistry is really there to produce the information; [and yet] the bioinformatics solutions are not.”

All these services and products would be sold only through the Eureka Genomics centers, Perez said. “[A] benefit of having our own distribution channel is that when one center develops a new product or service, it will be quickly distributed globally throughout all the centers,” he said.
Eureka joins a growing list of sequencing service providers including Seqwright and Clinical Data subsidiary Cogenics in the US, GATC Biotech in Germany, and in China, the Beijing Genomics Institute, which recently announced that it would be able to offer its services for a much lower price than US or European competitors.
Whether the worldwide model proves economical for Eureka’s future clientele has yet to be determined, although Koshinksky said that Eureka views bioinformatics as a key component in the sequencing services market — especially as next-generation systems move into the mainstream.
“The chemistry is really there to produce the information; [and yet] the bioinformatics solutions are not,” Koshinsky said.
She added that the situation “is similar to where we were five years ago when people were struggling with all that information that microarrays were producing. We’re going to see that — and are already seeing that — how to deal with the information [that] the next-generation sequencing and the third generation and fourth generation of sequencing instruments will produce.”
She said that the question then is, “’What are the bioinformatics tools that will let that information be best used?’” She believes that through the UH tools, Eureka Genomics is poised to address this question.
Fofanov said that the software suite is platform-independent and includes more than 100 algorithms, although he was unable to provide details by press time.
He said that Eureka Genomics does not plan to sell the computational tools as off-the-shelf software, but will only use them internally for the services business and for developing molecular diagnostics.
Soon, Eureka Genomics plans to employ three additional staffers at its Hercules location, including a biologist, computer technician, and business developer; by the second quarter the company will employ three additional lab technicians and a customer service representative. At its Houston location the company will have four computer technologists by Q2, according to Perez.
Each center, Perez claims, will have a next-gen sequencer, though it’s still being determined whether they will all be Illumina systems, such as the one at the Hercules site.
“We are platform agnostic and we are currently looking at SOLiD from [Applied Biosystems] and Helicos as well,” Perez said. “We have not made a decision as to what machine we will have in each center. This will be a case by case decision.”
John Warren, executive director of the University of Houston’s Center for Industrial Partnerships, told BioInform that Eureka Genomics will also have access to an Illumina sequencer on the UH campus, though he noted that part of the agreement is “not finalized yet.”
He said that while they are not currently CLIA-compliant, the labs expect to be by the third quarter of this year, and claimed that the compliance will only be necessary in order to perform the diagnostic services.
Perez said that Fofanov’s software was verified independently by both Investigen and Genomics USA, a microarray company that Perez said Eureka Genomics “has nothing to do with.” Genomics USA's website, however, lists Fofanov as part of the company “team.”
Perez said that the worldwide licensing agreement with UH “covers all commercial testing applications.”

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