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Curtain Call: Perlegen Ceases Operations, Decision Biomarkers Files for Bankruptcy

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By Justin Petrone

This article was originally posted on January 11.

Two separate firms that offered microarray technology closed their doors recently: Affymetrix spinout Perlegen Sciences ceased operations as of Oct. 30, 2009, while protein biomarker technology firm Decision Biomarkers closed up shop and filed for Chapter 7 bankruptcy last month.

Their demise adds two more names to a growing list of array-related businesses that have gone belly up or have been shuttered in the past few years. Applied Biosystems and GE Healthcare, for instance, decided to wind down their array businesses in 2007 with the latter selling its CodeLink Bioarray assets to Applied Microarrays (see BAN 10/30/2007, BAN 5/8/2007). Nanogen also closed its array business in 2007. After searching for a buyer for its NanoChip platform, it transferred the technology together with all its assets to EliTech last year. And in 2008, Lumera shuttered its Plexera protein array subsidiary when it merged with GigOptix (see BAN 4/1/2008).

In the case of privately held Perlegen, no reason has been given for its decision to cease operations. Officials from the Mountain View, Calif.-based company were not available to comment. The firm's website has little information remaining on it, but lists as its current contact RoseRyan, a Silicon Valley consulting firm. A call to a number listed on the site was not returned.

Perlegen, which was spun out of Affymetrix in 2001, had filed for an initial public offering in early 2006, hoping to raise as much as $115 million. It withdrew that plan roughly a year later, saying that its lead underwriters advised the company to wait for "the outcome of certain genetic studies in connection with an important, ongoing research initiative." The company never went through with the IPO.

The last known round of funding for Perlegen came in February 2005, when it raised $74 million from a private placement of Series D preferred stock. Several months later, Pfizer inked a collaboration with Perlegen and invested $50 million in the firm, giving it a 12-percent stake.

At the time of its IPO filing, Perlegen said that it was focused on developing and attempting to commercialize late-stage drugs as targeted therapies, coupled with related pharmacogenomic tests. But over the last couple of years, it had turned its focus on providing genotyping services while developing pharmacogenomic tests.

In June 2009, Perlegen received certification to operate its CLIA lab to begin commercializing its genetic tests, including its BrevaGen breast cancer risk test. Information regarding BrevaGen is still available on Perlegen's website, where the firm states that it plans to "make the test available nationwide through breast centers and physician clinics by early 2010." The firm previously had discussed plans to launch BrevaGen by the first half of 2009 (see BAN 9/30/2008).

The status of that test, the CLIA lab, partnerships, and other Perlegen assets is unclear at this time. It is also unclear what impact Perlegen's closure will have on Affy, which provided Perlegen with the tools for its genomic services business as well as test development initiatives. Affy has not commented on sales to Perlegen in recent quarters.

As of Sept. 30, 2009, Affy's ownership stake in the company was around 22 percent. In a filing with the US Securities and Exchange Commission dated Nov. 6, 2009, Affy said that as of June 30, 2005, it "had reduced the carrying value of its investment to zero through the recording of its proportionate share of Perlegen’s operating losses."

Affy also noted in the filing that it has "no obligations to provide funding to Perlegen nor does it guarantee or otherwise have any obligations related to the liabilities or results of operations of Perlegen or its investors."

An Affy spokesperson told BioArray News this week that "Affymetrix is an investor in Perlegen. The company previously wrote the basis of its investment to zero; therefore it has no remaining exposure."

DBI Bankruptcy

Another firm in the midst of being wound down is Decision Biomarkers, based in Waltham, Mass., which filed for bankruptcy on Dec. 22 in US Bankruptcy Court in Boston. DBI's website indicates that the company closed its doors as of Dec. 2, 2009.

"There are several companies interested in the technology and we are hopeful the business will be reconstituted in the near future," DBI said on its website.

Unlike Chapter 11 bankruptcy protection, which allows a company to reorganize its business while being protected from its creditors, Chapter 7 bankruptcy is generally sought when a firm cannot pay its debts.

In documents filed with the court, DBI said it had assets of up to $50,000 and liabilities greater than $1 million but less than $10 million. It also listed 90 creditors, including Dana Farber Cancer Institute, Fisher Scientific, MD Anderson Cancer Center, Memorial Sloan-Kettering Cancer Center, and PerkinElmer. A meeting has been scheduled for Jan. 20 in bankruptcy court.

Founded in 2003 by entrepreneur and Affy alum Jean "Coco" Montagu and CEO Roger Dowd, DBI was originally called Clinical Microarrays. It had transitioned from being an R&D shop to a commercial operation in 2005 with the launch of its AvantraTQ400 Biomarker Workstation, a biochip-based immunoassay that enables users to quantitate a panel of up to forty biomarkers using a sample.

The research-use-only system consists of an assay-processing and fluorescence-imaging platform and disposable biochips that contain all the reagents required for performing multiplex biomarker assays, according to the firm. DBI had developed cardiac, angiogenesis, and cytokine panels for use with the system.

In addition to the Avantra system, DBI sold PATH protein microarray substrates, formed by adhering a thin film of nitrocellulose onto a glass surface. The firm said this approach facilitated the binding of proteins and delivered high signal-to-noise and low background fluorescence in multiplex immunoassay applications.

The company raised $7.5 million in a first round of Series A financing in 2005 and $7.6 million in a second tranche in 2006.

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